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| | Does The Typical Insurance Policy Cover Meteorites? Probably.
By Michelle Logsdon - March 19, 2002More than likely, the typical property/casualty insurance policy covers damage from meteorites according to a recent report by Munich Re’s climate and natural disaster research team.
While in the process of assessing the insurance liabilities from last year’s natural disasters, including the Sept. 11 terrorist attacks, researchers considered the insurer’s exposure to other unexpected risks, in particular meteorites.
“No one ever believed two planes would crash into a skyscraper,” Thomas Loster, Munich Re’s head of climate and natural disaster research, told the Los Angeles Times. “So we have started looking at what’s at all possible instead of what’s likely.”
More than 100 meteorites, including asteroids, comets and space rubbish, hit the Earth during the 20th century and their potential for damage is astronomical. Loster’s report lists various byproducts of a meteorite’s collision with Earth that would be covered in a typical insurance policy.
The direct impact of the object would be covered under an all risks policy because meteorite impact is not specifically excluded in customary terms and conditions.
The wording of a named perils policy suggests coverage for meteorite impact as well. Most policies refer to covers for “loss, destruction or damage directly caused by pressure waves resulting from any aircraft or other flying object traveling at or above the speed of sound.”
Fires or explosions resulting from meteorite crashes are common in all risks covers and named perils covers. Although a bit more questionable, sea waves and earthquakes caused by meteorites hitting the Earth are also covered unless otherwise noted.
The frequency of meteorites hitting the Earth is low, but Loster and his colleagues Dr. Gerhard Berz and Angelika Wirtz, warn in their report that it does happen. And they warn the insurance industry to be ready for any scenario. “If a densely populated area were directly hit by a meteorite or by a sea wave after a meteorite crash, this could result in a loss accumulation of previously unknown dimensions.” |
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