Does Renters Insurance Cover Terrorism?

Does renters insurance cover terrorism?  This is a question which no one actually wants to think about, but which everyone in America needs to consider. While the risk of a terror attack is low, would your renters insurance protect you afterwards?

For these purposes, we can divide losses into three major categories: “General Losses,” “Terrorism,” and “War”.  Why is this important? Because the type of loss determines if you can have renters insurance cover terrorism.

General Losses

These are the everyday types of losses that insurance is specifically designed to cover. A kitchen fire. A burst pipe. Vandalism by kids in the neighborhood. Your renters insurance policy applied broadly to these types of losses, and claims are usually straightforward and easy. These don’t need to be defined narrowly here, because they’re exactly the kinds of things you think of when you think about renters insurance coverage.

Acts of War

A standard renters insurance policy is usually written on the HO-4 form which is written by the Insurance Services Office and designed to provide broad coverage and a clear understanding of what’s covered – and what’s not.  Acts of war are excluded. This would include things like war (declared or undeclared), civil war, insurrection, rebellion, or revolution.  War-like acts by a military force or military personnel are excluded as well.

That means that if Kruschevistan, which has a military, were to send members of that military here dressed as tourists with the object of burning down Phoenix, losses caused by those members of a foreign military would probably not be covered. Fortunately, there is an inherent zero risk in this particular scenario, since Kruschevistan is not a real country and therefore has no military. The idea does give one pause for thought, however.

Discharge of a nuclear weapon will always be considered to be war, or a war-like act, as will just about any nuclear related loss of any kind.  That will become important in a moment, however.

Terrorism

Terrorism is generally going to be covered under the policy.  War, broadly speaking, is a fight against another nation-state, or several of them, that involves formal military, or an insurrection or rebellion.  Terrorism is none of these things.  In order for a questionable act to be covered, however, it has to be declared to be an act of terrorism.  That’s the job of the Secretary of Treasury, and they seek the input of the Secretary of State and the Attorney General on the matter.  It has to be declared to be an act that is “dangerous to human life, property, or infrastructure, and to have resulted in damage within the US.

If an act is so declared, it’s likely to have coverage. If an act is not so declared, it’s likely to be a general loss, and have coverage.

On the other hand, nuclear terrorism is another matter altogether. If it involves nuclear material of any kind, it’s probably going to be considered an act of war. This dates back to the days when there was reasonable certainty that only nations had nuclear materials. Those days are gone, but the missing nuclear materials haven’t caused policy forms to be updated.

In general, people worry does renters insurance cover terrorism, but overall your risk is very, very low for such a loss. There are hundreds of thousands of fires every year, and many more losses due to burglary and theft, among other causes. Protect yourself with the renters insurance you need, and you won’t have to worry about them,  It’s easy, too.  Just call (800)892-4308 or click to get covered - whether you need renters insurance quotes online or coverage anywhere else!

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