In response to concerns that the Jewish community may be paying higher insurance premiums because of terrorist threats against it, state insurance regulators have called for a meeting of insurance company officials and Jewish leaders to discuss the issue Sept. 4.
New York State Superintendent of Insurance Gregory V. Serio requested the meeting after Abraham Foxman, national director of the Anti-Defamation League, raised concerns in letters to the White House and congressional leaders.
"Because of 9-11, general liability insurance rates are going up across the board," Foxman said in an interview. "Until last year, that coverage included terrorism. Now terrorism coverage requires an additional premium of up to 1 percent of the insured value of the building.
"So for a building valued at $20 million, terrorism coverage would cost an additional $200,000," he said. "Profit-making organizations will pass that on, but non-profit groups have to begin by cutting programs."
"This is a major crisis for our system," Diana Aviv, vice president of public policy for the United Jewish Communities, told the Jewish Telegraphic Agency. In some instances, rates have jumped 50 percent for Jewish institutions.
Because insurance companies take risk into consideration in developing premiums (for instance, teenage drivers pay more for insurance than older drivers) Foxman said he wondered whether the Jewish community was paying disproportionately higher rates because of the terrorist threats.
"We would be inadvertently discriminated against," he said. "The insurance companies are saying that’s not happening. Fine. But somebody needs to take a look and verify."
Jewish groups often fit into high-risk categories for insurance carriers, such as landmark sites or places of public assembly, Serio told JTA.
Still, he said, "if there are risks to Jewish groups or Jewish facilities, we need to make sure the company’s responses are reasonable. Insurance law just doesn’t allow insurance companies to walk away from their obligations."
The UJA-Federation of New York and its 44 beneficiary agencies in the area have also seen their insurance rates skyrocket. The group’s general liability rates soared 65 percent, from $2.4 million to at least $4.8 million, and property insurance shot up from $870,000 to $1.7 million, said John Ruskay, executive vice president of the UJA-Federation of New York.
Those costs could have significant ramifications for the services and programs that the federation provides.
"It comes at a particularly difficult time in terms of the economy" and cutbacks in government funding, Ruskay told JTA.
The high insurance costs "will lead to difficult choices about priorities and programs" throughout the entire system, Ruskay said.
The increased cost of insurance meant Congregation Bínai Jeshurun, an 1,800-family congregation on the Upper West Side of New York, had to "put off hiring some new people" and it "hurt us generally in expanding all of our programs," according to Ron Seitenbach, the synagogue’s director of finance and administration.