Many small rural and suburban towns in the U.S. are protecting their police stations and water towers with terrorism insurance, although officials say there is little risk of such attacks.  For a small village, the cost of the coverage can be less than $100 a year, and in many cases the coverage is a standard feature of government insurance pools. 

James Hamilton, director of pooling programs at the National League of Cities Risk Information Sharing Consortium said that terrorism coverage is a common feature in the 34 state insurance pool programs affiliated with the league, which cover nearly 16,000 towns, cities and schools.  Claire Wilkinson, vice president of Global Issues for the Insurance Information Institute, said that a Marsh study found that the median cost of terrorism insurance for a public entity in 2006 was $37 per $1 million of insured value, compared with a cost of $44 per million in 2004.  Wilkinson said that public entities pay different rates according to their level of risk and that complex issues affected the rating. Wilkinson explained that, unlike hurricane risk, insurers have less experience with terrorism risk, and it is very difficult to predict the frequency and severity of attacks.

Some Small Towns Opt to Buy Terrorism Insurance (USA Today 6/5/08)

June 10, 2008