Companies halt car terrorism insurance

INSURANCE companies won’t insure cars against terrorist attacks, even if drivers take out comprehensive cover.

The Irish Insurance Federation (IFI) confirmed yesterday that this cover has been withdrawn from the market.

“The high street companies can’t get the reinsurance they need to provide this,” an IFI spokesperson said.

The Federation insisted that the ending of car terrorism insurance was not linked to the invasion of Iraq.

The package was withdrawn due to uncertainty in the global economy following the September, 11 attack, the IFI said.

However, several companies provided this cover on comprehensive insurance packages following the Twin Towers disaster, but it’s no longer available here.

“When we talk about terrorism it refers to things like instability in the state, not events such as street riots or the May Day protests. It’s unlikely to affect many drivers here,” he said.

Insurance companies said they had no choice but to withdraw the cover.

“Terrorist attacks haven’t been covered for some time and this decision has been taken by all companies,” a spokesperson for FBD insurers said.

The Consumers’ Association of Ireland (CAI) last night expressed concern at the move.

“We would be worried that insurers know more about our exposure to terrorism than the general public.

“If they do know something I would urge them to say it publicly and not be underhand like this,” CAI chairman Michael Kilcoyne said.

The CAI also wants insurers to clarify what they mean by terrorism.

“I would be worried that if a car was damaged in strange circumstances, then insurance companies could claim it was terrorism. The exact position must be clarified,” Mr Kilcoyne said.

However, the drivers’ lobby group the Automobile Association (AA) said the move was understandable.

“I don’t think you can be overly critical of insurers on this, because it’s standard practice not to cover acts of war,” AA spokesperson Conor Faughnan said.

Insurers are still covering some commercial vehicles because they are legally required to do so.

“Vehicles like buses have to be covered but apart from that, we’re not doing this cover anymore,” a Hibernian Insurance spokeswoman said.

Insurance companies insist they are already hit with huge costs from bogus claims that totalled €65m in 2001.