Properties Magazine November 2012 : Page 44

CABOR CORNER Issues in the real estate industry Urging the Extension of the Terrorism Risk Insurance Act arlier this fall, the National Association of Realtors (NAR) reported that Linda St. Peter, operations manager for Prudential Connecticut Realty in Wallingford, Connecticut, testified on behalf of NAR at the House Financial Services Subcommittee on Insurance, Housing, and Community Opportunity hearing on “TRIA at Ten Years: The Future of the Terrorism Risk Insurance Program.” E HOWARD LICHTIG In her testimony, St. Peter urged Congress to extend the Terrorism Risk Insurance Act (TRIA) beyond its cur-rent December 2014 authorization to ensure that adequate insurance coverage is available for our nation’s businesses. According to NAR, following the September 11th attacks private insurers backed out of the terrorism insurance marketplace, which prompted Congress to enact TRIA, a federal insurance backstop that allows the federal govern-ment and private insurance companies to share losses in the event of a major terrorist attack, in 2002. The program has since been reauthorized by Congress twice – once in 2005 and 2007. TRIA helped stabilize commercial real estate markets by making terrorism coverage available and more affordable over time. While the cost and availability of ter-rorism insurance has generally improved, currently there is concern that the uncer-tain future of TRIA may cause insurance prices to fluctuate and prompt insurers to drop coverage. This became evident in both 2005 and 2007 when private insur-ers became reluctant to offer terrorism coverage due to the uncertainty regard-ing the program’s extension. Ultimately, the uncertainty of insur-ance pricing impacts the net operating income of businesses and property values. The potential unavailability of terrorism coverage could impact financing agree-ments and potentially hurt the fragile commercial real estate recovery. To read the entire NAR testimony on TRIA and for the most up-to-date commercial advocacy information, visit the webpage for Commercial Realtors on NAR’s website, www.realtor.org/com-mercial. As always, CABOR’s staff is happy to assist with any questions you may have, as well. P Howard Lichtig is the Immediate Past Chairman of the Cleveland Area Board of Realtors® (CABOR). For more information, visit CABOR online at www.CABOR.com. 1RLVH$EDWHPHQW‡,QWHULRU$FRXVWLFV‡+9$&1RLVH5HGXFWLRQ‡/(('9HULÀFDWLRQ &RPSXWHU$QDO\VLV‡)LHOG7HVWLQJ‡(IIHFWLYH6ROXWLRQV 0DWHULDOV DH KAISER CO IMPROVING WHA T YOU HEAR, WITH GREA TER FREQUENCY ZZZNDLVHUDFRXVWLFVFRP‡32%R[
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&#1a; 44 3URSHUWLHV | November 2012

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