According to ISO, a risk analysis company, San Francisco, New York, Washington, D.C., and Chicago are considered Tier-1 cities, meaning they are the most likely to be terrorized and, as a result, building owners there will likely see the sharpest increases in terrorism insurance premiums during the first year of coverage.

Dave Dasgupta with ISO tells GlobeSt.com that estimates in local newspapers of up to a 150% increase in insurance premiums during the first year of coverage in tier 1 cities are not accurate, but adds that ISO soon will be submitting true estimates to the insurance departments of states where tier 1 cities are located. The task has already been completed with regard to tier 2 and tier 3 cities, says Dasgupta.

Prior to the Sept. 11 terrorist attacks, the majority of U.S. insurance policies covered terrorism and did not single it out with an exclusion. However, since the attacks, terrorism is considered an exclusion, like earthquakes, floods, war, mold and mildew. As a result, property owners who want terrorism coverage must pay high rates for a separate policy.