Terrorism risk insurance report issued.
* 84 percent of outstanding commercial mortgages require terrorism insurance.
* Without terrorism coverage it is very difficult to finance commercial real estate transactions.
* Extreme fluctuations in terrorism insurance rates impact both the operating expenses of a commercial property and the value of the property.
* Increases in terrorism coverage cannot be passed on to tenants in triple net lease deals or in multifamily projects where rents are federally subsidized.
IREM and NAR support the creation of a semi-private mutual reinsurer subject to Treasury and Congressional oversight. This will ensure the long-term availability of terrorism coverage. The reinsurance proposal, developed by the Real Estate Roundtable, would create Homeland Security Mutual, a reinsurer privately funded but supported by the federal government until Homeland Security Mutual reaches $30 billion in reinsurance capacity.
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|Publication:||Journal of Property Management|
|Article Type:||Brief article|
|Date:||Jan 1, 2007|
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