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Total WTC insurance claims conservatively estimated at $40 billion
The terrorist attack of September 11, 2001 was the most expensive loss in the history of the insurance industry with a cost estimated at $40 billion.. The shock waves from this event will impact the price and availability of insurance coverage for years to come. Over 100 insurers around the globe are expected to pay an estimated $40 billion or more dollars in the course of settling tens of thousands of claims.
According to the Insurance Services Office (ISO), an industry provider of statistical, actuarial, and underwriting information, insurers estimated in November 2001 that the total cost of insurance claims from the World Trade Center attacks was expected to fall between $40 billion and $70 billion.
Non-life insurers, according to a report of the Insurance Information Institute (III), estimated that non-life insurers would pay an estimated $37.5 billion, or 93%, of the total insured losses while life insurers will pay approximately 7% of the losses for a monetary total of approximately $2.7 billion. Significant uncertainty in the $40 billion claims cost estimate remains due to the potential for extra-ordinarily large non-aviation liability costs, presently estimated at $10 billion.
The totals so far
$37.5 billion paid out by non-Life insurers, non-aviation liability costs, presently estimated at $10 billion, and $1.5-2.5 in replacement income from workers compensation and disability income insurers.
Injured or disabled workers and their survivors will receive an estimated $1.5-2.5 billion in replacement income from workers compensation and disability income insurers. Some of these benefits will be paid out over a period of decades.
Dave Dasgupta, spokesperson for the ISO indicated that commercial policyholders had been slow to report [insurance] claims perhaps because they've been more focused on restoring their business." Three years out, all insurance claims have either been settled or are pending a judgment in a lawsuit.
The claims reporting lag was seen equally in claims coming from individuals and businesses. People who lost property in or near the World Trade Center were presumably more focused on trying to restore or salvage what they could than on making insurance claims, says Dasgupta.