Insurance companies in India offered the option of coverage for residential and commercial properties for potential losses that might occur due to a terror attack starting almost ten years ago.

The amount of claims made good in 2002 was a mere Rs 0.56-crore and that for the year 2007-08 was Rs 188.79 as against a whooping Rs 500 crore for 2008-09 which was a result of the terror attack on Mumbai.

The Taj, Oberoi and Trident hotels suffered severe damages to the structures during the 26/11 attacks. The claims received by these hotels amounted to Rs 210 crore and according to some executives these were only interim payments as the final settlements were yet to be calculated. As a part of the comprehensive fire insurance policy, the Taj, Oberoi and Trident pay Rs 15 lakh, Rs 10 lakh and Rs 6 lakh respectively as annual terror premium.

General Insurance Corporation (GIC) of India is not worried as the business is booming for the insurance firm. GIC maintains a common pool, which was formed by the general insurance firms from the premium collected under the terror insurance cover. This reserve is now at Rs 1,500 crore. Firms are allowed to withdraw amounts to settle the claims in case of loss to insured structures.

Regarding the pool a GIC official briefed, “As per the terrorism insurance pool arrangement, all general insurance companies have to contribute 100% of the terror risk insurance premium to the pool. The underwriting results of the pool like premium, claims and expenses are shared among the pool members in agreed proportions.’’

A GIC official said regarding collections last year, ‘‘We received a total premium of Rs 235 crore in 2009.’ GIC however have been accused of slowing down the claim process as some experts point out that buildings, which are direct victims of terror attacks, must be compensated.

According to an estimate around Rs 100 crore has been given as premium for terror cover by commercial establishments and residential properties in Mumbai alone.