On May 5, the Mortgage Bankers Association (MBA) released a survey that found the Terrorism Risk Insurance Program is indeed filling a critical role for the multifamily and commercial industry. The survey captured information on $1.5 trillion of mortgage debt outstanding and found that 70 percent requires terrorism insurance. Of those required to have insurance, 93 percent of them have coverage in place. This helps further bolster support for efforts underway in Congress to reauthorize the Terrorism Risk Insurance Act (TRIA) set to expire at the end of the year.
Apartment owners and renters are required by lenders to have a policy in place on existing properties, as well as future development projects. Without an extension, insurance carriers have said they are unwilling to provide coverage past this year. If the program is allowed to expire, borrowers will most likely face significant cost increases and economic development will slow triggering severe economic instability.
A bipartisan group of senators recently reached consensus on legislation to reauthorize TRIA. The House is reported to be drafting legislation to reauthorize the program and related action is expected before Memorial Day.
NMHC/NAA have been working with our real estate partners in the Coalition to Insure Against Terrorism to advance legislation.