OVERWHELMING LOSSES
By Roland L. Enz - President, California Plus Insurance Services, Inc.

Black, White, Brown, Red and Yellow, we are all under attack by a worldwide network of extremists. On September 11th the United States awoke to the surreal sights of New York under attack by an enemy that could not be seen. At that hour and date our lives changed.

No longer will our citizens be free from the tentacles of extreme fanatical opponents, bent on the destruction of our country and lifestyle. September 11th was the opening shot. We must now come together, united in our passion for this country, and be aware of the fact that the enemy walks among us.

Christian, Moslem and Jew, Protestant and Catholic, Basque Separatists, Israel, Palestine and its Arab neighbors are all but a few, creating opportunities for extremism. Why is it that most of the extreme acts revolve around religion? Religious turf wars, the Crusades, the Holocaust, ethnic and religious cleansing - all are examples of man’s inhumanity to man.

The United States was built by the blood, sweat, and toil of those wanting a new life, free from religious persecution and free from tyranny. We owe it to our founding fathers to give allegiance to our country and to embrace those that choose to become citizens of our great nation.

The impact of September 11th, both socially and economically, will be overwhelming. The loss of life will be monumental and the economic consequences staggering. The insurance industry is assessing its monetary impact. Billions of dollars will be lost and this will go down as the industry’s largest catastrophic loss in history.

As we watched the morning’s events unfold, with the collapse of one tower then another, in all consuming five major structures and damaging countless more, monetary loss to property was mounting by the billions. Loss of life will stress our life insurance companies. Death and disabilities will stagger both disability and workers' compensation carriers. The insurance industry is worldwide and its loss will affect all of us in future premiums. The concept of insurance is simple: the insured’s, the loss, and the ability of the system to pay those losses. But will the system have enough to pay for these losses and is it willing to?

Some insurance companies may invoke act-of-war clauses. Fact is, all insurance policies contain certain terms and exclusions. War, the act of war, insurrection, rebellion and revolution are common exclusions. It has always been my belief that war has to be declared. The mere statement by President Bush, “declaring war on the enemy” does not constitute the legalities of putting the United States into war. War is declared by our legislature. For legal purposes, precedents specify that the acts of war must involve actions between sovereign nations. It would be a major public relations mistake for any insurance company to avoid paying claims.

Terrorism exclusions are rare in this country. Future insurance policies will be written with more precise language, to include terrorism and terrorist attacks. New York and the entire financial district around the World Trade Center is headquarters to many of the world’s leading corporations. Many of the nation's major financial institutions, including the Securities Exchange Commission, were wiped out or received extensive loss and damage - all of this will affect us financially.

Over 5,000 people lost their lives in a senseless, self-centered act of cowardice. Our nation mourns its loss and we mourn with those families that lost their loved ones. God bless America and God bless those that were taken. If you have any comments or if you would like to discuss any insurance-related questions, I can be reached through California Plus Insurance Service, Inc., at 1-800-699-7101.