Insurance Information Institute President Robert Hartwig has outlined the importance of the Terrorism Risk Insurance Act (TRIA) to the US House of Representatives.

TRIA was introduced in 2002 as terrorism cover fell away following the September 11 2001 attacks. It is due to expire at the end of next year.

The government program, which has already been extended twice, provides reinsurance coverage in the event of major losses.

Testifying before an insurance subcommittee, Mr Hartwig argued TRIA’s expiration would result in a $US69 billion ($74.14 billion) hit to real GDP within three years.

About 290,000 jobs would be lost and $US798 billion ($857.47 billion) would be shaved off household net worth.

“In terms of impacts on insurance markets there is no question that coverage will become more expensive and less available – and in many cases unavailable,” he said.

“Without question, TRIA and its successors are the principal reason for the continued stability in the insurance and reinsurance market for terrorism insurance today.”

Mr Hartwig says it is “virtually certain” terrorism exclusions will soon reappear.

Many other nations, including Australia, the UK, France and Germany, have programs similar to TRIA and none are considering discontinuing them, he told the House.

The cost to US taxpayers is “effectively zero”, with the Federal Government paying nothing but “negligible administrative expenses” since TRIA was launched.

Mr Hartwig says terrorism risk remains essentially uninsurable due to the inability to predict events’ frequency or severity.

Despite the death of Osama bin Laden in 2011, the threat from attacks “is both real and substantial and will remain as such for the foreseeable future”.