He illustrates how problematic the lack of action will be: "I just received a call from a client trying to close a loan, but the policy was going to mature six months post-loan closing. He's facing uncertainty as to whether or not the coverage will be renewed. If so, it will probably be at exorbitant cost."

And those costs couldn't come at a worse time, states John Garippa, president of the American Property Tax Counsel and a partner at the Montclair, NJ-based law firm Garippa, Lotz & Giannuario. Given the state of the economy and the aftermath of Sept. 11, he says that "certain segments of the industry have been devastated. This is just another brick added to an overwhelming load. Net income is what determines a property's worth, and that'll be lessened because of substantially increased insurance coverage. Assessments will be reduced, and as that happens, the tax burden on the general population will go up." It is impossible to predict exactly how much those assessments will be affected, Garippa and Kohn agree, since much of the valuation depends on location and type of property.

RER's DeBoer explains that the Senate's inaction was due to a combination of things, not the least of which was the relatively quick post-9/11 learning curve that Congress had to travel since "the insurance industry is not Federally regulated. There were also some differing views on how to solve the problem--should it be a loan program, which is how the House chose to deal with it, or a quota-share program where part is paid by insurance and part by the Federal government, with the percentages changing as damages rise."But the death knell, he says, was a Republican-backed rider about tort-liability reform concerning punitive damages caused by terrorists. "It is such a divisive issue," he explains, that it further bogged down progress.

DeBoer states that the course for the industry, and especially for lobbyists rallying around the issue, is clear. "All of this means that we are going to have to redouble our efforts next year," he states, "refine our arguments, find real examples of where this is causing economic disruption and present the case on Capitol Hill."

John Garippa is grimly confident that there will be no shortage of real examples. "This could go away in June," he says, when premiums are once again up for renewal. "But there are people right now who are feeling it because they are planning and budgeting, and those budgets are already hitting rock bottom."