The FBI's decision not to categorize the Christmas Day bombing in Nashville as an act of terrorism was met with dismay by some progressive activists and politicians, but the property insurance ramifications could actually benefit those directly affected.
Metro Nashville Police Department Chief John Drake told Metro Council members during a briefing on Monday the bombing that tore apart Second Avenue and knocked out emergency communications across the region will not be deemed a terrorist act by the FBI.
The bombing remains under investigation, but law enforcement have said it was carried out by Antioch resident Anthony Quinn Warner, a 63-year-old man who died in the blast.
Nashville attorney Mark Bell, a partner at Waller Law and specialist in insurance coverage, said many property insurance policies don't cover acts of terrorism.
That means property and business owners on Second Avenue could have been out of luck or forced into insurance claims disputes over losses sustained by the morning bombing.
"It's a rare situation that most people don't think about when they're buying insurance or looking at insurance coverage," Bell said. "In a totally random event like this, it could depend on the language of your policy."
Bell said many policies have specific exclusions for terrorism, and almost all property insurance policies have exclusions for acts of war.
Some policy holders purchase extra insurance to cover random events, such as terrorism. Sometimes those policies can be vague in determining whether an incident is categorized as terrorism or not.
The push to call the Christmas morning bombing terrorism had nothing to do with insurance coverage. Some political leaders argued that authorities are quick to categorize crimes by people of color as terrorism. But in many cases those definitions are made by politicians or media outlets and have no bearing on an insurance policy.
It's a relatively new area of insurance coverage law, Bell said. The Terrorism Risk Insurance Act allows policies to offer special coverage to property owners. Under that law, passed after 9/11, it falls to the Secretary of the Treasury to declare an act as terrorism. Under those policies, it doesn't matter what law enforcement says, simply that the treasury secretary makes a terrorism designation, which has not happened since the law passed.
"All that really matters under those policies is if you have the Secretary of the Treasury declaring it as an act of terrorism," Bell said.
Other terrorism policy carve-outs are not so specifically defined, Bell said.
"The issue is on the other policies, the vaguer policies, where they just say 'terrorism,' you may have a fight between the insured and the insurance company about whether this bomb was terrorism or not," Bell said. "And if the FBI says it's not, and the mayor says it's not, and everybody is sort of saying it's not terrorism, then you're in a much better place as an insured. You're able to go to court, if it comes to that, and say, 'Everybody agrees this was not terrorism. The FBI even says it wasn't terrorism.' So it can be helpful, if you have the terrorism exclusion, for the FBI to say it was not a terrorist act."
During the council briefing on Monday, Metro Councilwoman Delishia Danielle Porterfield asked Drake if the bombing, which affected at least 41 buildings and injured about six people, was domestic terrorism.
"I would like to know why this is not being labeled as domestic terrorism," Porterfield asked. "We need a clear answer on that, because that is something that our constituents are asking us and we do not have that information."
Drake said the question of whether the bombing is terrorism is up to the federal government.
"The FBI looked at it and deemed it wasn't domestic terrorism," Drake said. "Although it did go off near the AT&T building, they did not label it terrorism."
Metro Councilwoman Courtney Johnston followed up on the terrorism question and the possible impact on insurance coverage and other potential federal support.
"The FBI has deemed this not to be a terrorist act," Drake said. "I have to get the details as to why they said it wasn't. I believe it's some type of political ideology. They believe this particular person may not be politically motivated."