Insurance commissioner rejects plan to limit insurers' liability

ATLANTA - Insurance companies will not be able to exclude terrorism from homeowners&#39; policies, but the state has put off a decision on a proposal to limit insurers&#39; liability for commercial property. <br> <br> Insurance Commissioner John Oxendine said Wednesday that passing the liability to consumers in the case of another terrorist attack would be inappropriate. <br> <br> ``I think it is a risk that can be better assumed by the insurance industry and not individual families,&#39;&#39; Oxendine said. ``Most people have their entire net worth in their homes, and to put that at risk is something I&#39;m not prepared to ask Georgia families to do.&#39;&#39; <br> <br> The request by Insurance Services Office Inc. would have capped at $25 million the amount that could be claimed by all homeowners in a single terrorist attack. Two other states, New York and California, have rejected the proposal. <br> <br> Oxendine has not ruled yet on a separate ISO proposal to limit insurers&#39; liability for commercial property because of concerns over its definition of terrorism and the trigger for the exclusion kicking in. Forty-seven states have approved the commercial proposal. <br> <br> An ISO spokesman said the industry has assets of about $300 billion for insurance claims, but that the cost of the Sept. 11 attacks alone could cost up to $70 billion. <br> <br> ``Insurers&#39; real concern is that the potential losses of another terrorist attack are almost infinite, while the industry&#39;s ability to pay claims is finite,&#39;&#39; spokesman Christopher Guidette said. ``It&#39;s large, but finite.&#39;&#39; <br> <br> Previously, the single biggest catastrophe for the industry was Hurricane Andrew, which cost the industry about $15 billion in 1992, he said. <br> <br> Guidette said Congress is considering proposals to create a backstop mechanism that would prevent industry-crushing losses. <br> <br> Oxendine said he supports such a backstop, noting that the federal government already provides flood insurance. <br> <br> ``There is a history of the federal government stepping in when private industry chooses not to offer a service,&#39;&#39; he said.