Getting insured in New York tougher _ and costlier _ since Sept. 11

<br>NEW YORK (AP) _ Property insurance in New York has become far more costly and harder to obtain after the Sept. 11 attack, raising concerns that major buildings will be underinsured. <br><br>``Terrorism

Friday, August 23rd 2002, 12:00 am

By: News On 6

NEW YORK (AP) _ Property insurance in New York has become far more costly and harder to obtain after the Sept. 11 attack, raising concerns that major buildings will be underinsured.

``Terrorism was covered by insurance prior to Sept. 11 but never priced into insurance,'' said P.J. Crowley, vice president of the Insurance Information Institute, a nonprofit organization supported by the property and casualty insurance industry.

``We price insurance based on things that happen on a frequent basis,'' Crowley said. ``We now have an experience of a major terrorism attack.''

Many insurers in Manhattan are not writing new policies and when they do are limiting risks and raising premiums as much as 300 percent, said T.J. Derella, vice president of the Professional Insurance Agents of New York State. The problem is particularly acute near the World Trade Center site.

Fewer policies and higher premiums have been seen to lesser extents in other U.S. cities and at ``trophy'' properties and government buildings, analysts say. Across the country, properties as diverse as Jewish charity buildings and bridges are more costly to insure because they are potential targets for terrorists.

Although property owners are reluctant to discuss their coverage, Derella said he suspects ``major properties'' in New York are quietly going underinsured because of rising premiums. The agents' group also said property owners once covered by one company are now forced to carry smaller policies with various companies.

Gary Walunas, whose Broad Street Florist shop is not far from ground zero, said he lost $15,000 to $20,000 in business after the attack. The shop was in a closed-off zone, without electricity for a week and telephone service for three weeks.

His insurance company, Utica National, reimbursed part of his losses. But when his policy was up for renewal, he said, the annual rate increased from $1,000 to $1,500 and the deductible doubled from $250 to $500.

``Many businesses are having similar problems, and some can't get as much insurance as they need because they just can't afford it,'' he said.

Utica National spokesman Mike Austin said he could not comment on specific cases but said premiums reflect the terrorist threat.

``Everyone is paying for the cost of terrorism. If our company can get reinsurance, it's become very, very expensive now,'' he said. ``Since Sept. 11, we try not to concentrate risk in one building or one block.''

Rising insurance costs are considered a drag on the sluggish economy in lower Manhattan, where commercial vacancy hovers near 15 percent, twice the rate of a year ago. The city comptroller is expected to release the results of a survey next month on the economic impact of the insurance changes.

The troubles actually started before Sept. 11, when the economy took a downturn; premiums began to climb to make up for the decline in insurance companies' investment income.

But the attacks caused companies an estimated $50 billion in losses _ far more than the total blamed on 1992's Hurricane Andrew, which drove a dozen insurers out of business.

Gregory Serio, superintendent of the New York Insurance Department, said the attacks ``could not have come at a worse time.''

Compounding the difficulties, industry experts say reinsurance companies, which provide backing for insurance companies, are hesitant to back big policies in New York _ one of five states that has not approved the use of terrorism exclusions in insurance policies.