|
February 14, 2003
DISR Reaches Agreement with ISO on Terrorism Loss Costs
DC Insurance Commissioner Lawrence H. Mirel announced an agreement with the insurance advisory organization, Insurance Services Office (ISO), regarding commercial property terrorism loss costs for the District of Columbia.
In early January, Commissioner Mirel raised strong objections to the loss costs that ISO had originally proposed. Those loss costs put the District of Columbia, along with three other US cities, into the highest of three countrywide risk tiers. Initially, ISO rated the first-tier cities 5 times riskier than the five second-tier cities and 100 times riskier than the rest of the country. The entire states of Maryland and Virginia are included in the third tier. This rating system had the potential to negatively impact commercial businesses in the District of Columbia.
“The nation’s capital is a potential target for terrorists, as are many other places in the country. However, the real target is the United States and the American people, not the people who do business in Washington, DC. The loss costs initially submitted by ISO could have resulted in increases for some commercial property owners of 100% or even 150% over current loss costs”, said Commissioner Mirel. “I am very pleased that we have been able to work out an interim agreement with ISO that does not unfairly burden District businesses”.
ISO’s initial proposal was to charge all District commercial property 10 cents per $100 of value for commercial property terrorism coverage. That has now been reduced to 3 cents per $100, and even that loss cost will be applied only in the downtown area (as far north as DuPont Circle and as far west as Rock Creek Park, both in Northwest Washington). The rest of the District will pay rates that are comparable to other locations in the United States. Apartment houses, even in the area defined above as “downtown”, will pay only 1.8 cents per $100 of value. The maximum increase any property can be charged will be capped at 25% of the commercial property premium without terrorism coverage.
Page 1 of 2  1 2  | 
