Waking up to the Threat of Terrorism

Six years ago this September the world changed. The tragedy of ‘9/11’ and what followed delivered a new fear of terrorism into the lives of millions. It brought global security issues into our backyards, and ever since there has been a collective anxiety about what could happen next.

 

Today, the threat of terrorism on UK soil remains undimmed. Only last November MI5 announced that it was aware of 30 terror plots that could threaten UK security. They also made it clear that, overall, the threat of terrorism in the UK was “growing” – a situation that is already putting pressure on insurance companies to increase their household insurance premiums.

 

A threat to our homes

The threat of terrorism is just one of several factors that influence the cost of buildings and contents insurance. Increased risk of flooding, a higher burglary rate and a higher rate of insurance claims are up there in the mix, and combine with the terrorist threat to push up our premiums.

 

Buildings insurance is, understandably, one of the policies hardest hit. Our homes and places of work are often first to suffer when a major insurance event like a windstorm or fire strikes. The same can be said for the effects of terrorist activity.

 

Acts of terrorism are always going to be tough to deal with for a number of reasons. Our own safety and the safety of others is of course paramount in these situations. Concern for the safety of our properties comes next. Should our homes be damaged as a result of terrorist activity, with the right insurance cover in place we can at least rest assured that the costs of repairing or rebuilding our properties are not going to cripple us financially. It does however beg the question as to what is the 'right' level of insurance cover.

 

Insurance cover for terrorist activity

UK building insurance policies, in most instances, provide financial protection against an act of terrorism that damages residential property. Specifically, residential building insurance policies are designed to pay out on claims for damage sustained by fire, explosion or impact, regardless of whether the cause was accidental or through a deliberate malicious act. An act of terrorism falls into this latter category.

 

Consequential costs are normally covered too. So if you needed to stay in alternative accommodation while your property was being repaired your insurance policy could foot the bill for up to 20% of the sum insured.

 

Having said this, it is highly recommended that householders read their policies thoroughly to ensure that no exclusions are cited in connection with damage caused by terrorist acts. It must also be noted that, at this time, the UK insurance industry DOES NOT legislate for contamination caused by terrorist activity. If contamination is the only issue you won't have cover for consequential costs either.

 

Do you live in a block of flats?

Building insurance for some flats in the UK may be classed as commercial property insurance. If this is the case, damage to property caused by terrorism is covered in a separate 'top-up' policy available on the market. You will find when taking up this option that contamination cover is offered. This will cover the cost of damage, clear up and of alternative accommodation should your flat be affected by biological, chemical or radiological contamination as a result of terrorist activity. It is certainly a step up from your standard residential policy and provides a level of financial protection that is as comprehensive as you could reasonably hope to wish for as far as your property is concerned.

 

Is it time you examined your buildings insurance policy again?