Canadian Underwriter

Future of WTC remains unsettled

August 6, 2002   by Canadian Underwriter

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The future of the World Trade Center (WTC), including the insurance settlement on the structures destroyed in the September 11, 2001 terrorist attacks, remains unknown. Published reports this week suggest the City of New York has offered to take control of the site from the Port Authority, in exchange for control of the sites of LaGuardia and Kennedy airports.
Part of the rationale, the reports speculate, is that the City wants to discourage rebuilding of large commercial structures on the WTC site.
The battle continues to rage between WTC leaseholder Larry Silverstein and insurers led by Swiss Re over the insurance settlement on the structure. Silverstein is seeking double theUS $3.5 billion payout on the policy, claiming the September 11 attacks represent two individual loss events.
Swiss Re vehemently denies this claim and now says that the actual cash value of the buildings is less than US$3.5 billion, with their own experts pegging the claim at US$2.4 billion. The actual cash value was appraised by independent appraiser Pearson Partners at US$2.156 billion, Swiss Re adds.
Silverstein is not entitled to actual cash value, however, as he would have to decide not to rebuild to receive the payout, Swiss Re says. Should he choose to rebuild, he would then be entitled to rebuilding costs up to the policy’s US$3.5 billion limit, the reinsurer asserts.
Silverstein recently estimated losses from September 11 at US$8.2 billion, including US$5.7 for the property itself.

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