9/11 Impact on Auto/Home Rates

Insurance losses from the Sept. 11 terrorist attacks, the largest loss in insurance history, will have little impact on the cost of auto and homeowners insurance next year, according to the Insurance Information Institute (I.I.I). But the costs of property and liability insurance for commercial businesses are expected to increase, in some cases significantly, due to multiple factors, from rising costs to a broader demand for insurance protection. Insurers are expected to pay at least $40 billion in claims from the terrorist attacks, most of that to commercial businesses. Insurance premiums nationally for private homes and automobiles will rise about six percent in 2002, the same as 2001. Premiums for commercial businesses, after decreasing over the past few years, will increase by about 30 percent on average in 2002, reflecting market forces that existed both prior to and after Sept. 11.