TRIA Coverage in Trucking Insurance: Terrorism Is Often Excluded

 

TRIA Coverage in Trucking Insurance

With the world seemingly on fire, it seems like a good time to review TRIA coverage.  Every trucking insurance quote comes with a stack of paperwork. Sometimes right at the end there is a page about terrorism coverage.

You might have signed it without looking at what box was checked off.

That page is connected to the Terrorism Risk Insurance Act, commonly referred to as TRIA.

What TRIA Is

TRIA stands for the Terrorism Risk Insurance Act.

Congress passed it after the 9/11 attacks when insurers realized terrorism losses could be catastrophic and unpredictable. Many insurance companies began excluding terrorism entirely because the financial exposure was too large.

TRIA created a system where private insurers and the federal government share the cost of certified terrorism events. The program allows insurers to offer terrorism coverage without taking on the entire risk alone.

How Terrorism Is Defined Under the Law

The form included with most policies provides a very specific definition. Under TRIA, an act of terrorism must be certified by the Secretary of the Treasury, in consultation with the Secretary of Homeland Security and the Attorney General.

The act must:

• Be violent or dangerous to human life, property, or infrastructure
• Cause damage inside the United States, or in some cases to U.S. property abroad
• Be committed as part of an effort to influence U.S. policy or coerce the civilian population

If those criteria are not met and the event is not certified by the federal government, TRIA does not apply.

How TRIA Pays

When a certified terrorism event occurs, the federal government reimburses insurers for part of the loss after the insurer has paid its “statutory deductible.”

Since 2020, the federal share has been 80 percent. That means the insurance carrier ultimately retains about 20 percent of the loss while the government reimburses the rest.

Across the entire insurance industry, the TRIA program caps insured terrorism losses at $100 billion in a single calendar year.

The form also explains that the policyholder should review their policy carefully because coverage for nuclear, biological, chemical, or radioactive events may be excluded under other parts of the policy. These exclusions are separate from the TRIA election.

This is common across many commercial insurance policies. Insurers limit exposures tied to extremely large scale or systemic losses that could impact multiple industries at once.

If You Didn’t Sign a TRIA Form, It Is Probably Excluded

When terrorism coverage is offered under TRIA, the insurer must provide a disclosure and give the policyholder the option to accept or reject the coverage.

That is why you will usually see a TRIA election form included with the quote or application paperwork. If you signed an application and never saw that form, it is generally safe to assume terrorism coverage is not included in the policy.

In other words, if the election was never offered or documented, the policy typically defaults to the existing terrorism-related exclusions.

Truck U Take

Trucks move through ports, fuel terminals, rail yards, chemical plants, and massive distribution hubs every day. Because trucking operations intersect with these facilities, terrorism exposure still appears inside many commercial insurance programs.

Many carriers decline the coverage to save a little premium, but the bigger takeaway is that terrorism is often excluded unless it is elected.

 

 

Need Help Reviewing Your Coverage?

If you want help reviewing your trucking insurance program or understanding the optional coverages in your policy, we are happy to walk through it with you.

Call or text 254-294-7798
Email info@trucku.biz

 

Disclosure

This post is for educational purposes only. It is not legal advice, insurance advice, or a substitute for calling your agent. Truck U is good, but we are not psychic. Policies vary, laws change, and courtrooms get weird. Do not make decisions based solely on something you read on the internet unless it is from us, in writing, with your name on it.

All opinions are our own and do not represent the views of any carrier, employer, or underwriting department that occasionally wishes we were quieter on LinkedIn.