NYT: New Business Blooms in Iraq: Terror Insurance

BAGHDAD, Iraq — Twice in the past year, Muhammad Said has survived assassination attempts that left his car riddled with bullets. He works part time as a bodyguard for his father, a Baghdad city councilman, and helps a friend who has contracts with the American military. Both are very dangerous jobs.

So last month, Mr. Said, a slim, baby-faced 23-year-old, did what a small but growing number of Iraqis are doing: He walked into the offices of the Iraq Insurance Company and bought a terrorism insurance policy. It looked like an ordinary life insurance policy, but with a one-page rider adding coverage for "the following dangers: 1) explosions caused by weapons of war and car bombs; 2) assassinations; 3) terrorist attacks."
It cost him 125,000 dinars, about $90. Mr. Said paid more than most people because of his risky occupation. The payout, if he dies, is five million dinars, around $3,500, or about what an Iraqi policeman earns in a year.

That guarantee appears to be the first off-the-shelf terrorism policy in the world, insurance experts say. In most countries, of course, there is no need for it: death by terrorism is rare enough that it is usually covered by ordinary accident insurance. In Iraq it is not, partly because the state used to compensate the families of war victims directly. So the Iraq Insurance Company began stepping into the gap about a year ago.

"Am I worth only five million dinars?" Mr. Said asked wearily, after signing his policy. "It is not a solution. But Iraqis can be attacked by anyone, just walking on the street: Americans, insurgents, the Iraqi Army." The payout is not a lot of money, even by Iraqi standards. But in a country where terrorism kills hundreds of people a month and no one can rely on the government or employers to provide for their relatives afterward, it seems to be an idea with a future.

http://www.nytimes.com/2006/03/21/international/middleeast/21insurance.html?hp&ex=1142917200&en=118634a60d4f33dc&ei=5094&partner=homepage

:party:

IIRC, even Trent Lott is suing his home insurance company (State Farm).

The NYT article on creative underwriting simply numbs my mind.

from the article:

The idea of insuring ordinary people in what may be the most violent place on earth came from Abbas Shaheed al-Taiee, an executive at the Iraq Insurance Company.

"It is a kind of gift to the Iraqi people," said Mr. Shaheed, 53, a big, heavyset man with terribly serious eyes and a reputation as a master salesman. "We have expanded the principles of life insurance to cover everything that happens in Iraq."

Amazingly, the company has yet to pay out on a single claim.