Terrorism and Life Insurance

Following on from the tube train and bus bomb attacks in London there was a move from several UK

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insurance companies to reassure victims that claims would be processed "quickly and sympathetically". This need for reassurance came in light of concerns that many victims of the blasts would not be covered by their existing health and life insurance cover. This would mean that families of the bombing victims could not only lose a relative, but also suffer financial hardship as life insurance companies refuse to pay out on policies.

Standard Life, Axa-PPP and Norwich Union all announced that policy holders would be covered for events on the 7th July. Standard Life said that the company was not looking to "cause more distress" to victims and their families.

Reuters have been told that other firms such as Churchill, Endsleigh and Direct Line are likely to be sympathetic when dealing with people who have been injured or whose holidays have been disrupted, however these insurers have fallen short of announcing complete cover.

Churchill said that it would, "provide cancellation and personal accident cover if customers are physically injured on the way to their holiday departure.in addition, if any of our customers are away on holiday and hear of injury or death to a close relative, we will facilitate their return home.missed departures due to travel delay in central London will also be treated sympathetically."

This is despite Churchill including 'acts of terrorism' exclusions into their policies. This means that policies will generally not pay-out if losses are sustained due to any terrorist activities. This represents one of several general exclusion clauses which are often regularly added to many policies and which prevent payout for particular potentially costly situations for the insurers.

The terrorism exclusion is still regularly included in policies despite the ( life insurance quotes ) introduction in 1993 of the Terrorism Insurance Program which provides reinsurance cover to the majority of U.K. insurers, is expected to absorb a large proportion of the insurance claims resulting from the 7th July attacks. Under the program, the insurance industry as a whole is liable for 75 million pounds per terrorist "event", with losses above that ( loans ) covered by a mutual reinsurance pool. Should the costs rise above the funds available through the pool, then the UK Treasury will step in to cover the remaining costs.

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