Rural Ala. County Buys Insurance Against Foreign-Based Terrorism

December 29, 2005

A rural south Alabama county has boosted its insurance coverage to cover any attack by a foreign-based terrorist group after a discussion over such an unlikely event.

The Clarke County Commission approved the $7,000 annual premium for the insurance that covers the county’s buildings and property.

“I don’t foresee an attack happening, but you can sleep better knowing that if something did happen we’d have coverage,” Commission Chairman Rhondel Rhone said.

County property is already covered against domestic terrorist attacks through the existing insurance policy, Rhone said.

Commissioner Paul Bradford said Clarke County – population 27,422 – isn’t a probable target for groups like al-Qaida.

“The likelihood of that happening is the same that I’m going to be on the next moon shot,” Bradford said during the meeting. “I think it’s another way for the insurance people to make money.”

But the commission vote was unanimous.

Before the 9/11 terrorist attacks in 2001, Clarke County and other local governments were once routinely covered for such attacks by the same polices that covered other damages to public property, said Joseph Annotti, senior vice president of the insurance trade group Property Casualty Insurers Association of America.

Many firms began excluding terrorist attacks from policies since then.

The coverage was restored in 2002 after Congress agreed to pay the bulk of damages over $50 billion. Insurers are now required to offer the insurance in separate policies.

Annotti said about half of all commercial insurance policy holders have terrorism insurance. Clarke County, he said, would be part of that group. He said rural counties aren’t the usual customers, though. Real estate developers, owners of big office buildings, transportation companies and entertainment venues are some of the more usual customers.

While there may not be a lot of risk for rural counties, Annotti said, there’s not a lot of investment in insurance premiums either.

Buddy Sharpless, executive director of Association of County Commissions of Alabama, said his organization does not track how many counties have purchased this insurance, but he has gotten calls seeking advice.

He said he tells them it’s a judgment call to be made looking at potential threats exist in the area, what the county owns and how much the insurance costs.

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