We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is Terrorism Insurance?

Tricia Christensen
By
Updated Jan 29, 2024
Our promise to you
WiseGeek is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGeek, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Terrorism insurance could be any type of insurance company guarantee that they will pay a sum of money should something be destroyed, damaged or otherwise altered due to terrorist acts. There are many different types of terrorist insurance, ranging from protection of property or product to protections if a person is kidnapped and ransomed. Even terrorism travel insurance exists.

In some countries, especially where huge terrorist actions have occurred, insurers may be loath to offer terrorism insurance. The cost of payout should a terrorist attack occur could be in the nature of millions or billions of dollars. Certain country governments have tried to alleviate the concern of insurers by agreeing to insure or help companies make payments when huge tragedies hit. This has been true in the US, which passed the 2007 Terrorism Risk Insurance Program Reauthorization Act, so that insurers would not feel as though a terrorist attack on their clients would destroy their companies.

As much as it might seem greedy or unfeeling to want this type of security, an insurance company must be invested in remaining in business. Should an attack hit that affects many of that companies clients, it could very well cause the company’s collapse. Thus having partnership with the US government allows insurers to offer terrorist insurance to virtually any entity or individual that wants it.

In other countries, terrorism insurance is available too, including in those countries where terrorism is much more likely to occur, like Iraq. It may not be all the same types, and might depend on how each company assesses risk. In the US for instance, people might not seek life insurance that has a terrorist insurance clause because the policy doesn’t exclude death by terrorism. However in places like Iraq there is insurance specifically for that.

Of course the goal of any insurer is to make certain that insurance like terrorism insurance is spread out over a sufficiently wide group of people. This may not always be accomplished. People might not be particularly worried that their homes will come under the attack of terrorists. Businesses on the other hand, particularly if they’re in large buildings in major urban areas might be more concerned. The goal for the insurer then would be to make sure to enroll business in lots of different cities and in lots of locations so profit stays high, and most customers remain unaffected if a terrorist attack occurs.

Another angle in terrorism insurance is selling trip or travel insurance that could refund money if a trip gets canceled due to terrorism, help pay damages on property that are ruined by terrorist acts, or that may pay some sum to relatives when a person becomes a victim of terrorism. Most insurers will never need to pay claims because even when people travel to more violent areas, the chances of getting injured or harmed are still small. Those interested in this insurance should check to see if they need it, since other policies like life or medical insurance policies may already provide them with ample coverage.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Tricia Christensen
By Tricia Christensen
With a Literature degree from Sonoma State University and years of experience as a WiseGeek contributor, Tricia Christensen is based in Northern California and brings a wealth of knowledge and passion to her writing. Her wide-ranging interests include reading, writing, medicine, art, film, history, politics, ethics, and religion, all of which she incorporates into her informative articles. Tricia is currently working on her first novel.

Related Articles

Discussion Comments
By anon1001603 — On May 21, 2019

I don't really like the fact though, that some terrorists blew up the twin towers. I visited the memorial and museum last week. It was so tragic and horrible!

By reader888 — On Feb 05, 2011

Maybe it's just me, but you wouldn't catch me traveling someplace where I would need to purchase travel insurance to cover terrorism.

I think I'll just stay at home and enjoy my nice quiet life.

By jlmk — On Feb 03, 2011

What a scary world we live in, that we have to have terrorism insurance coverage. I'd never even heard of terrorist insurance before reading this article, but it seems like a good idea to have it available. Especially for people who live in or have businesses in an area that would be a more likely target if terrorists were to attack.

I don't think I live in an area like that, but I'm happy that this is available for those who do.

Tricia Christensen
Tricia Christensen
With a Literature degree from Sonoma State University and years of experience as a WiseGeek contributor, Tricia...
Learn more
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.