Why It Matters
The federal terrorism insurance backstop is set to expire at the end of 2027, and Congress has yet to resolve whether, and on what terms, to extend it again. A new Congressional Research Service (CRS) report lays out the policy choices lawmakers face as they weigh reauthorization of the Terrorism Risk Insurance Act (TRIA).
TRIA does not pay policyholders directly. Instead, it reimburses private insurers for a portion of losses after a certified attack when industry-wide insured losses exceed the $200 million program trigger, and each insurer absorbs a deductible equal to 20% of its premiums on eligible lines. Coverage is limited to commercial property and casualty insurance; it excludes life, health, and personal lines. According to CRS, it is uncertain whether private terrorism coverage would remain available and affordable without TRIA.
The Big Picture
The Terrorism Risk Insurance Program (TRIP) was created after the September 11 attacks, when insurers and reinsurers pulled back from offering terrorism coverage; CRS estimates insured losses from those attacks at approximately $60 billion in current dollars. Congress enacted TRIA in 2002 (P.L. 107-297) as a temporary, three-year program and has since extended it four times, most recently through P.L. 116-94 in 2019.
No attack has been certified under TRIA, and no federal payments have been made. Treasury analyses cited by CRS describe the market as generally stable, with take-up rates ranging from about 60% to nearly 80%. Premiums for TRIP-eligible lines totaled $314.1 billion in 2024.
CRS identifies four recurring reauthorization questions: whether the program remains necessary; whether the private sector should assume more risk; and how TRIA should address nuclear, chemical, biological, or radiological events and cyberterrorism.
Two reauthorization bills are before Congress. The House Financial Services Committee reported H.R. 7128, sponsored by Rep. Mike Flood (R-NE), in March. It would extend TRIA through 2034 and establish a $10 million minimum insured-loss threshold for certifying an act of terrorism beginning in 2029. S. 4395, introduced by Sen. Dave McCormick (R-PA) in April, would extend the program seven years without additional amendments.
The Bottom Line
TRIA previously expired for 12 days before President Barack Obama (D) signed P.L. 114-1 in January 2015. With the program scheduled to expire again at the end of 2027, Congress must decide whether to extend the federal backstop and whether to modify the government's role in terrorism insurance.
Access the Legis1 platform for comprehensive political news, data, and insights
Spot something wrong? Report an issue with this article