Few Central Iowa companies are buying insurance policies that would compensate them for losses resulting from terrorist attacks, despite frequent warnings from state and federal officials that such attacks could occur in the future.

“My sense is that there’s not a lot being purchased,” said Fred Haskins, general counsel for the Iowa Insurance Institute.

Prior to Sept. 11, 2001, most insurers provided coverage against terrorism at no extra cost to customers. Afterward, most property and casualty insurers refused to offer such coverage without some protection against catastrophic losses from the federal government. Last fall, Congress passed measures for government support and mandated that property and casualty insurers offer coverage to any company that wants it.

In recent weeks, Des Moines insurers began mailing letters to their clients informing them that coverage was now available. In most cases, the companies have 30 days to sign up for the coverage, or they must wait until their next renewal period, according to Tom Riley, a vice president at Marsh USA in West Des Moines. Still, there aren’t a lot of takers, despite the availability.

There are several reasons the coverage is proving unpopular. First, the types of protection that are offered by insurers are limited to acts of terrorism by foreigners and don’t cover actions by American extremists. Second, the premiums can be expensive, often adding 20 percent to a company’s premium expenses. Finally, most companies in Greater Des Moines just don’t see themselves as credible targets.

“We’re not seeing a lot of buyers here,” said Kip Augspurger, a senior vice president at West Des Moines-based insurance broker Holmes Murphy & Associates Inc. “Most people in this part of the country don’t view terrorism the same way that (managers of) airports or high-rises in major cities would.”

Augspurger said that just 1 percent of Holmes Murphy’s customers have purchased policies insuring all of their operations against terrorist attacks. Twenty-four percent of clients are buying policies that would cover part of their operations. The remaining 75 percent aren’t buying any terrorism insurance, he said.

So far, the purchasers of terrorism insurance tend to be manufacturers or other companies that have a large amount of buildings or equipment, Augspurger said.

In some cities outside Iowa, companies are required by banks to purchase terrorism coverage as a prerequisite for obtaining loans. Banks in Iowa aren’t making those requirements, according to Ben Hildebrandt, a spokesman at the Iowa Bankers Association.

Kathy Harkema, a spokeswoman at Pella Corp., the window and door maker, said the company frequently evaluates its insurance needs and that because terrorism insurance is relatively new, the company “was still in evaluation phase” about whether it would buy any.

Meredith Corp., the publisher of Better Homes and Gardens magazine, has boosted its coverage in recent weeks, according to spokesman Art Slusark.

The company owns 11 television stations across the country in cities including Atlanta, Hartford and Portland, Ore. Outside Des Moines, Meredith’s largest office is in New York City, across the street from Grand Central Station. The company publishes Ladies’ Home Journal and More magazines out of that office.

“We have taken some coverage,” Slusark said. “We’re always looking at the best ways to cover our businesses, both from natural and man-made disasters.”

The Terrorism Act, a breakdown:

The Terrorism Risk Insurance Act, which went into effect Nov. 26, is designed to protect insurers against bankruptcy in the event of an act of terrorism by providing federal support over a certain level of losses.

The short-term law expires at the end of 2004, but can be extended by the Treasury Secretary through 2005. Under the act, all insurers that provide property and casualty insurance are required to offer insurance against terrorism to their customers.

The policies don’t cover all terrorist acts, only those performed on behalf of foreign citizens or interests, and damages from the act must exceed $5 million for the federal support to be triggered, according to a summary of the Terrorism Act provided to the Business Record by Tom Riley, a vice president at Marsh USA.

In addition, the treasury secretary, the attorney general and the secretary of state must certify any losses associated with terrorism. Lastly, the terrorism has to take place within the United States, “except in the case of air carriers, vessels, or occurrences on the premises of a U.S. mission,” the summary said.