§ Mr. CarringtonTo ask the President of the Board of Trade if he will make a statement on the additional premiums to be charged for terrorism cover for blocks of flats.
§ Mr. HeseltineThe new arrangements under which the Government will act as reinsurer of last resort in respect of damage caused by terrorist activity apply primarily to industrial and commercial property. The arrangements do not affect the property and homes of private policy holders, and these continue to be covered by insurance companies in exactly the same way as in the past.
In the case of blocks of flats, the insurance companies have now decided that they will also continue to cover a property whose sum insured is under £2.2 million. Where a property's sum insured is above £2.5 million, the policy holder will be able to buy additional terrorism cover. The basic additional terrorism premium for a block of flats in London and other major city centres will be about one ninth of that for other industrial and commercial property and about one third in other parts of the country.
These arrangements for blocks of flats represent a significantly more modest contribution from policy holders than previously envisaged.