PROPERTY INSURANCE

Property Insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance or boiler insurance. Property is insured in two main ways - open perils and named perils. Open perils cover all the causes of loss not specifically excluded in the policy. Common exclusions on open peril policies include damage resulting from earthquakes, floods, nuclear incidents, acts of terrorism and war. Named perils require the actual cause of loss to be listed in the policy for insurance to be provided. The more common named perils include such damage-causing events as fire, lightning, explosion and theft.
 

Property Insurance Claims

World Trade Center case

Following the terrorist attacks of 11 September 2001, a jury deliberated insurance payouts for the destruction of the World Trade Center. Leaseholder Larry A. Silverstein sought more than $7 billion dollars in insurance money; he argued two attacks had occurred at the WTC. Its insurers – including Chubb Corp. and Swiss Reinsurance Co. – claimed the “coordinated” attack counted as a single event. In December 2004, the federal jury decided in Silverstein’s favor.
In May 2007, New York Gov. Eliot Spitzer announced more than $4.5 billion would be made available to rebuild the 16-acre (65,000 m²) WTC complex as part of a major insurance claims settlement.

Post-Hurricane Katrina

In the wake of Hurricane Katrina, several thousand homeowners filed lawsuits against their insurance companies accusing their insurers of bad faith and failing to properly and promptly adjust their claims. Insurance companies changed their pricing policies after Katrina, with most policyholders in New Orleans seeing their property insurance premiums double after the storm, and deductibles increase by two, or even three, fold. The losses from Katrina severely impacted both the affordability and coverage amounts provided by property insurance, even in regions that were not impacted by the hurricane.