Terrorism (TRIA) Coverage

The Terrorism Risk Insurance Act (TRIA), first enacted in 2002 and reauthorized through December 31, 2027 by the Terrorism Risk Insurance Program Reauthorization Act of 2019, requires an insurer writing commercial property and liability lines to offer the policyholder coverage for a certified act of terrorism. Coverage only responds once the Secretary of the Treasury, together with the relevant federal officials, certifies an event as a certified act of terrorism, and the program itself only engages after aggregate insured industry losses cross a statutory trigger, currently set at two hundred million dollars. A community association master policy is a commercial policy, so the carrier must make this offer, and the board can either accept the coverage (usually for an additional premium) or sign a written rejection that stamps a terrorism exclusion onto the policy. This is separate from standard property and liability coverage; without the TRIA endorsement, damage from a certified terrorist act is excluded.

For most suburban garden-style communities, terrorism is a low-salience peril and the board may reasonably decline the coverage to save premium, but the decision should be a deliberate, minuted board action rather than a rejection form a prior agent signed without anyone noticing. The stakes rise sharply where a building carries a loan: a lender, particularly on a commercial or blanket mortgage over a larger or urban property, can require terrorism coverage as a condition of the loan, and a signed TRIA rejection then creates a coverage gap that violates the loan covenant and can put the association in technical default. Confirm whether any loan documents mandate terrorism coverage before deciding, read the master policy declarations to see whether TRIA was accepted or rejected, and if it was rejected, verify that decision still matches what the community's lenders require. The additional premium for accepting the coverage is typically modest relative to the total property premium.

The TRIA offer and its price are governed by the statute and the insurer's filing, so this is not a term a board negotiates so much as one it consciously elects. The specialty community-association markets present the offer and the rejection form at binding; the practical work is making sure the acceptance or rejection on file matches lender requirements, and that a rejection was an informed board choice rather than a default carried forward at renewal after renewal.