Policy Watch: Challenges for Terrorism Risk Insurance in the United States
AbstractThis paper examines the role that insurance has played in dealing with terrorism before and after September 11, 2001, by focusing on the distinctive challenges associated with terrorism as a catastrophic risk. The Terrorism Risk Insurance Act of 2002 (TRIA) was passed by the U.S. Congress in November 2002, establishing a national terrorism insurance program that provides up to $100 billion commercial coverage with a specific but temporary risk-sharing arrangement between the federal government and insurers. TRIA's three-year term ends December 31, 2005, so Congress soon has to determine whether it should be renewed, whether an alternative terrorism insurance program should be substituted for it, or whether insurance coverage is left solely in the hands of the private sector. As input into this process, the paper examines several alternatives and scenarios, and discusses their potential to create a sustainable terrorism insurance program in the Unites States.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10870.
Date of creation: Nov 2004
Date of revision:
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Other versions of this item:
- Howard Kunreuther & Erwann Michel-Kerjan, 2004. "Policy Watch: Challenges for Terrorism Risk Insurance in the United States," Journal of Economic Perspectives, American Economic Association, vol. 18(4), pages 201-214, Fall.
- H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sandler, Todd & Enders, Walter, 2004. "An economic perspective on transnational terrorism," European Journal of Political Economy, Elsevier, vol. 20(2), pages 301-316, June.
- Lapan, Harvey E & Sandler, Todd, 1988.
"To Bargain or Not to Bargain: That Is the Question,"
American Economic Review,
American Economic Association, vol. 78(2), pages 16-21, May.
- Lapan, Harvey E. & Sandler, Todd, 1988. "To Bargain or Not to Bargain: That is the Question," Staff General Research Papers 10817, Iowa State University, Department of Economics.
- Kent Smetters, 2005. "Insuring Against Terrorism: The Policy Challenge," NBER Working Papers 11038, National Bureau of Economic Research, Inc.
- Lee, Dwight R, 1988. "Free Riding and Paid Riding in the Fight against Terrorism," American Economic Review, American Economic Association, vol. 78(2), pages 22-26, May.
- Doherty, Neil A & Lamm-Tennant, Joan & Starks, Laura T, 2003. " Insuring September 11th: Market Recovery and Transparency," Journal of Risk and Uncertainty, Springer, vol. 26(2-3), pages 179-99, March-May.
- Erwann Michel-Kerjan & Burkhard Pedell, 2005. "Terrorism Risk Coverage in the Post-9/11 Era: A Comparison of New Public–Private Partnerships in France, Germany and the U.S.*," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan, vol. 30(1), pages 144-170, January.
- Erwann Michel-Kerjan & Paul A. Raschky & Howard C. Kunreuther, 2009.
"Corporate Demand for Insurance: An Empirical Analysis of the U.S. Market for Catastrophe and Non-Catastrophe Risks,"
2009-10, Faculty of Economics and Statistics, University of Innsbruck.
- Erwann Michel-Kerjan & Paul A. Raschky & Howard C. Kunreuther, 2009. "Corporate Demand for Insurance: An Empirical Analysis of the U.S. Market for Catastrophe and Non-Catastrophe Risks," Working Papers hal-00372420, HAL.
- Erwann Michel-Kerjan & Paul Raschky & Howard Kunreuther, 2011. "Corporate Demand for Insurance: An Empirical Analysis of the U.S. Market for Catastrophe and Non-Catastrophe Risks," NBER Working Papers 17403, National Bureau of Economic Research, Inc.
- Kessler, Denis, 2008. "Insurance market mechanisms and government interventions," Journal of Banking & Finance, Elsevier, vol. 32(1), pages 4-14, January.
- Erwann Michel-Kerjan & Burkhard Pedell, 2007.
"How Does the Corporate World Cope with Mega-Terrorism? Puzzling Evidence from Terrorism Insurance Markets,"
- Erwann Michel-Kerjan & Burkhard Pedell, 2006. "How Does the Corporate World Cope with Mega-Terrorism? Puzzling Evidence from Terrorism Insurance Markets," Journal of Applied Corporate Finance, Morgan Stanley, vol. 18(4), pages 61-75.
- Zaneta Chapman & Thomas Getzen, 2012. "Hazardous immorality: strategic externalization of risk and credit pricing," Journal of Risk Finance, Emerald Group Publishing, vol. 13(4), pages 381-391.
- Siqueira, Kevin & Sandler, Todd, 2007. "Terrorist backlash, terrorism mitigation, and policy delegation," Journal of Public Economics, Elsevier, vol. 91(9), pages 1800-1815, September.
- W. Viscusi, 2009. "Valuing risks of death from terrorism and natural disasters," Journal of Risk and Uncertainty, Springer, vol. 38(3), pages 191-213, June.
- Daina McDonald, 2006. "150 Issues of The Australian Economic Review: The Changing Face of a Journal over Time," Melbourne Institute Working Paper Series wp2006n01, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
- Kunreuther, Howard & Michel-Kerjan, Erwann, 2012. "Impact of behavioral issues on green growth policies and weather-related disaster reduction in developing countries," Policy Research Working Paper Series 6241, The World Bank.
- S. T. M. Straetmans & W. F. C. Verschoor & C. C. P. Wolff, 2008. "Extreme US stock market fluctuations in the wake of 9|11," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 23(1), pages 17-42.
- Howard C. Kunreuther & Erwann O. Michel-Kerjan, 2007. "Evaluating The Effectiveness of Terrorism Risk Financing Solutions," NBER Working Papers 13359, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.