Washington Property & Casualty Practice Exam 2025 – Complete Test Prep

The Terrorist Risk Insurance Act (TRIA) primarily addresses the insurance industry's response to acts of terrorism, particularly focusing on providing a stable market for property and liability insurance related to such acts. Under this act, insurance companies are required to offer coverage for losses resulting from acts of foreign terrorism, thereby ensuring that businesses and individuals have financial protection against attacks that could cause significant damage to property and result in liability claims.

The act is designed to help stabilize the insurance market in the aftermath of terrorist attacks by involving the federal government to share financial losses with insurers, which makes it less risky for insurance companies to provide this coverage. This coverage requirement means that policyholders can depend on receiving support in the event of a terrorist incident, specifically linked to foreign threats.

The other options cover areas that are either not part of TRIA's mandate or misinterpret the scope of the law. For instance, the act does not extend to health insurance or workers' compensation related to terrorism, nor does it differentiate between domestic and foreign terrorism within its coverage framework. This makes the focus on property and liability insurance for losses due to foreign terrorism the correct perspective.