Terror attack claims pegged at Rs 700 cr

State-owned General Insurance Corporation (GIC) is expecting terror insurance claims worth Rs 700 crore from the two hotels that were under attack on November 26, 2008, despite the surveyors yet to give their final estimate.

“There are two surveyors working on the terror-hit hotels and it will take some time for them to assess the actual claim,” said Tata AIG General Insurance Chief Executive Officer Gaurav Garg.

Initial estimates suggested that the claims could be Rs 500 crore, but the insurers are now expecting it to go up marginally. Any claim out of the terror pool comes with a ceiling of Rs 750 crore from a single location. The domestic reinsurer was expected to increase the cover per location to Rs 1,500 crore, sources said.

The total corpus of the terror pool is estimated at Rs 1,500 crore. With an outgo of Rs 700 crore, general insurers are left with little choice but to increase the premium rates, sources said.

In addition, companies and individuals opting to purchase terror covers are expected to see an increase in premium rates as reinsurance rates have hardened following the Mumbai attacks.