People in apartments are now able to insure against the risk of a plane being hijacked by terrorists and crashing into their building.

Residents will also be able to insure against a variety of other terrorist acts – including accidental detonation of a bomb being built in an apartment, or a car full of explosives being driven into the building.

The Federal Government’s Australian Reinsurance Pool Corporation (ARPC) – which was set up in response to the withdrawal of terrorism insurance cover by insurance companies globally after the September 11 terrorist attacks in 2001 – only covers commercial buildings.

However, NSW-based underwriting agency CHU is offering cover of up to $50 million for high-rise and low-rise units. The offer applies to residential strata insurance plans and community association plans (residential risks).

CHU says the sum will suit 99% of strata complexes in Australia. Previously if strata title owners wanted terrorism cover they were forced to try the overseas insurance market, but many found it too expensive.

ARPC Chief Executive Neil Weeks told Sunrise Exchange News that offering this type of cover indicates a softening market. “It’s symptomatic of the fact that the market has been softening for some time and insurers are offering more in their policies.”