CFA: Terror Insurance Premiums Too High

Insurance companies are still charging high premiums for terrorism insurance despite a federal backstop that covers nearly 90% of all claims, according to a report by the Consumer Federation of America.The consumer group opposed the terrorism insurance bill that Congress passed five months ago, and now reports that insurers are still demanding excessive rates from their higher-risk customers. "To make matters worse, insurers are refusing to cover some kinds of terrorist attacks and don't appear to be granting refunds to consumers who deserve them," CFA director of insurance Robert Hunter said. Gary Karr, a spokesman for the American Insurance Association, said the law is not perfect, but that in general it is working. "It is getting insurance to the people who needed it," Mr. Karr said. But the CFA contends that Congress needs to take a look at the implementation of the Terrorism Risk Insurance Act. "It is time for Congress to get wise to the insurance industry's tricks, and hold tough oversight hearings," Mr. Hunter said.