All-Risk policy would offer protection for this rarest of
occurrences, say insurers
February 15, 2013
Meteors enter the Earth’s atmosphere as often as five to ten
times a year, but few do so as spectacularly as the one that exploded in the
sky over Central Russia on Friday.
According to Space.com, it was the largest event of its kind
since the Tanguska event of 1908. The meteor entered the atmosphere at a speed
over 54,000 kph and according to preliminary estimates exploded with the force
of at least 100 kilotons of TNT.
The force of the explosion caused injuries to as many as
1,000 people. Many of the injuries were caused by flying glass from shattered
windows. It also damaged approximately 3,000 buildings, including collapsing
the roof of a local factory and damaging the walls of the Arena Traktor, home
of the local Kontinental Hockey League team.
Property damage caused by a meteor is, however, an insurable
risk.
“A commercial property policy provides all-risk coverage
that covers property damage and resulting time element loss if there is direct
physical loss or damage to insured property unless specifically excluded,” says
Timon Mueller, head of property underwriting for the Americas for Allianz
Global Corporate & Specialty. “In general, all-risk policies do not have a
meteoroid exclusion, therefore direct physical loss or damage to insured property
is covered including the resulting time element loss.
Commercial property policyholders in North America would
likely be covered in the event of an incident like the one that occurred in
Russia. “In the US in general the policies are written on an all risk basis
compared to a named perils policy. Named peril policies are more common in
Europe,” say Mueller.
Claims from meteor damage are very rare. “This has
translated to a low loss history historically for the insurance industry for
this peril,” says Joe McKeown, assistant vice president, property, large
commercial & specialty at RSA. However there is the potential for large
losses from meteorite damage. “We hope the claim experience continues to allow
us to provide this coverage to our customers,” he says.
