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Abstract

A unique combination of insurance payments, government programs, and charitable distributions provided benefits to individuals and businesses affected by the 9/11 terrorist attacks. This research quantifies the benefits received by the various victim groups from each compensation mechanism. It examines how the benefits stack up against various measures of equity and assesses outcomes based in part on interviews with stakeholders in New York City. Issues are identified that policymakers should consider as they formulate policies for compensation and assistance in the event of a future attack.

The injury, death, and destruction caused by the 9/11 terrorist attacks posed an enormous challenge for the U.S. compensation system. Insured losses alone — more than $32 billion — were 30 times greater than the largest previous insured losses from a terrorist attack (the London bombing of 1993). How did the U.S. compensation system perform following 9/11, and what lessons can be drawn from that experience to improve the system’s response to large-scale incidents in the future? To answer these questions, a RAND Institute for Civil Justice study examined the compensation paid to victims of the 9/11 attacks. The report on that study, authored by RAND analysts Lloyd Dixon and Rachel Kaganoff Stern, draws a detailed portrait of the compensation amounts and their sources. Focusing on the impact of the attack on the World Trade Center, the data for the study was obtained from interviews with key stakeholders in New York City and from sources in government, charitable organizations, and the insurance industry.