Everyone from commuters to school kids is paying a price for
rising insurance costs - due in part to the recent spike in
It's a subtle ripple-effect of Sept. 11. For example:
* Tolls on San Francisco's Golden Gate Bridge may jump from $3 to
$5, in part because, starting today,the span's insurance costs $1.1
million a year - more than double last year.
* Airline passengers, who used to pay two or three pennies toward
terrorism insurance each trip, will soon be paying about 70 cents -
though that's far less than the $2.25 that had been expected.
* Lease rates - and thus retail prices - could jump at
Minnesota's Mall of America because owners had to buy a terrorism
policy covering $100 million in potential damages for an undisclosed
* Forty high-schoolers in Roxbury N.J., had to cancel a study-
abroad trip to Australia this summer because their school couldn't
find travel insurance that covers terrorism.
Today President Bush is set to meet with insurance executives,
labor leaders, and others to push Congress to address these problems
with a federal safety net for Americas' insurance firms. Supporters
of the safety net argue that Uncle Sam's backing would stabilize the
insurance, commercial real estate, construction, and other
industries - thus boosting the economy.
Others say the insurance industry is in far better shape than
many expected after Sept. 11 and doesn't need federal support. They
say federal backing will create a virtual welfare program for
insurance firms. One possible effect: softening vigilance in
mandating that structures they insure are terror-proof. This could
weaken America's safety in the event of another attack.
Despite dire predictions about the industry after Sept. 11, "Lo
and behold the sky didn't fall," says Travis Plunkett, of the
Consumer Federation of America, a liberal group critical of the
The idea for an industry safety net was sailing through Congress
last fall. It passed the House, but stalled over a tort-reform
debate in the Senate. (Tort-reform backers wanted to limit terror
victims' rights to sue for negligence after an attack - for instance
if a poor-performing guard was allowed to stay on the job). The
House-passed plan would have insurance firms pay the first $1
billion in terrorism losses. The government would pay 90 percent of
further claims. Momentum appears to be building again.
Backers say places like the Golden Gate Bridge are emblematic of
broader industry troubles. The bridge's new insurance policy costs
$1.1 million per year for $50 million in coverage - and doesn't
include protection for terrorism. …