New Condo Laws U.S. territories U.S. territories—what are they? Resource kit 90092 By Dan Corbin, CPCU, CIC, LUTC There are certain questions a diligent insurance practitioner must ask when determining whether or not coverage will apply to a claim, questions that any good investigative reporter would need to ask. One of these is— Where? Where does the qualifying event have to take place in order for coverage to exist? Policy territory Suppose one of your cosmopolitan customers calls you on her way out of town to ask whether her auto policy will cover a rental car. Naturally, you would fire back with a question, "Where do you intend to rent the auto?" "Oh," she says, "just a little place out in the Pacific Ocean called Wake Island, halfway between Midway and Guam." No problem, you look up the territory description found in Part F—general provisions of the Insurance Services Office Inc. (ISO) Personal Auto Policy and find the following: The policy territory is: 1. The United States of America, its territories or possessions; 2. Puerto Rico; or 3. Canada. This policy also applies to loss to, or accidents involving, "your covered auto" while being transported between their ports. Canada, you know is not in the Pacific and Puerto Rico is in the Caribbean/Atlantic region. There is a state located out in the Pacific, but it is Hawaii. So the only hope for coverage is in the territories or possessions of the United States. Now all you need is an exhaustive list of these locations. Well, what a coincidence! I just happen to have done a little research on this very subject. U.S. territory It turns out that our nation has jurisdiction over a number of distant lands and they each have a unique relationship with the federal government. The relationship usually starts with the concept of a territory. Whether a territory is acquired by a grant, a purchase or as the spoils of war, it necessitates that some government be established in the region. From that point, an inhabited territory will usually develop varying degrees of autonomy. Nevertheless, our territories are dependencies, and in this capacity, derive all political authority from the U.S. federal government (e.g., organic laws). You may be surprised to discover that U.S. territorial law (Northwest Ordinance under the Articles of Confederation) briefly preceded U.S. Constitutional law. The territorial law established the pattern for governing our territories, and their admission into statehood became attainable when the Constitution placed appropriate authority in the hands of Congress. By 1912, the conversion of all U.S. territories located on our mainland frontiers resulted in the completion of the contiguous United States. Later, however, the two distant territories of Alaska and Hawaii were welcomed into the fold of statehood. Most of our other distant territories were acquired following the Spanish-American War. With the exception of Puerto Rico, which last voted to reject statehood in 1998 (the Philippines in 1946 chose independence rather than statehood), these territories do not even come close to becoming states. This is because they are unincorporated territories. Only incorporated territories are eligible to become states and the United States does not currently possess any incorporated territories. This whole matter of incorporation of territories developed from the Insular Cases of 1901 when the Supreme Court made such a distinction. Incorporated territories, the court held, were entitled to all guaranteed rights under the Constitution, whereas, unincorporated territories have only fundamental rights (lacking formal or procedural rights). It is Congress who has the authority to decide the incorporated status of a territory. And Congress is reluctant to bestow all constitutional rights upon a territory until there is some surety of stable democratic self-government. Cultural divergence and long distances can be inhibiting factors in the incorporation of a territory. A further distinction is made among unincorporated territories. They are deemed to be either organized or unorganized. Organized territories are governed by Congress, while unorganized territories are governed by executive-branch officials (e.g., the Department of Defense or the Department of the Interior). Only the territories of Guam and the U.S. Virgin Islands are currently organized. Commonwealths Puerto Rico. First, let's make sure we understand how Puerto Rico is related to the United States and why it has been singled out in the territory definition of the Personal Auto Policy. It ceased to be a territory in 1952, becoming a commonwealth with a current population exceeding three and a half million residents who enjoy a fairly high standard of living. Commonwealth is a quasi-technical term for a republic that governs itself with respect to its internal affairs, while remaining an integral part of a federation; people banded together for their common good in a free associated state governed by common consent. Commonwealth is the official title given to such states as Pennsylvania, Virginia, Kentucky and Massachusetts, but the term would fit all the other states equally well. In the case of Puerto Rico and the Northern Mariana Islands, it is a term designated by Congress to distinguish them from other territories and the full status of statehood. Although no longer technically a territory, the authority of Puerto Rico to self-govern is derived from U.S. congressional approval of their Constitution. Unlike the states, Puerto Rico has no voting representation in Congress and its residents do not vote in presidential elections. But as U.S. citizens, Puerto Ricans are subject to military conscription as well as most federal laws. They don't, however, have one thing residents of states do have—a federal income tax. Mariana Islands. The Northern Mariana Islands became a commonwealth of the U.S. in 1986. They were formerly under U.S. trusteeship, labeled the Pacific Islands trust territory, comprising 2,000 Marshall, Caroline and Northern Mariana islands of Micronesia, 100 of which were inhabited. Following World War II, the United Nations placed many dependent territories or colonies under the administration of various countries. The intent was to promote independence among these trust territories as their development permitted such self-determination. All but the Northern Mariana Islands secured their independence in the Federated States of Micronesia. No other U.S. trust territories remain, the last being Palau of the Caroline Islands, which chose independence in 1994. Fifty percent of the Mariana work force, drawn from a population of about 50,000 persons concentrated mainly on the larger islands of Rota, Saipan and Tinian, are employed in tourism. Most of the tourists are Japanese, but English is the official language. Its people are U.S. citizens, but lack representation in Congress. A geographical phenomenon of interest is that the islands are flanked by the Mariana Trench, the most deep ocean floor in the world, being six-and-three-quarter miles below sea level (about the equivalent of an airline jet's cruising altitude above sea level). Organized territories Guam. An organized territory of the United States, Guam is the largest of the Mariana Islands, but separated from the Northern Mariana Islands which were placed by the United Nations into the U.S. trust territory. It is separate because the U.S. possesses pre-World War II rights to Guam, as it was acquired from Spain in 1898. Guam's government was organized by the Organic Act of 1950 and its residents were granted U.S. citizenship that same year. The people of Guam do not vote in national elections, but obtain representation by a nonvoting delegate in the House of Representatives. Tourism is one of two major contributors to Guam's economy. The other is U.S. military spending. Thirty percent of the 66,000 work force out of a population of about 133,000 persons are employed by the government with Andersen Air Force Base wielding a major influence. U.S. Virgin Islands. The U.S. group of the Virgin Islands, so named by Christopher Columbus, was purchased from Denmark in 1917. The major islands of Saint Croix, Saint Thomas and Saint John, along with its 40 smaller islands have come to symbolize the ecstasy of a Caribbean vacation. As an organized territory, the people elect their own governor and legislature with Congress reserving the right of disapproval and reformation. Its residents are U.S. citizens, but without presidential voting privileges, and they have a nonvoting Representative in Congress. Unorganized territories American Samoa. This is an unorganized territory of U.S. citizens administered by the Department of the Interior. The population of approximately 67,000 is engaged in tourism, agriculture and tuna exporting industries. These southernmost islands of the South Pacific Samoa chain, including Swain's Island, are represented in Congress, but lack the power of federal voting. Johnston, Baker, Kingman Reef and Palmyra Atolls. Atolls are curious circular rims of coral reef formed around a lagoon, usually having multiple islets. Like many Pacific islands, Johnston Atoll was once valuable as a source for collecting guano (waste matter of sea birds and bats) to be used as a fertilizer. Now it is a site for the incineration of chemical weapons under the jurisdiction of the Department of Defense. Baker is currently a wildlife refuge under the Department of the Interior and the uninhabited Kingman Reef is a restricted area controlled by the Secretary of the Navy. Palmyra consists of largely uninhabited private property serving as a yacht stopover, but earmarked for future tourist development. Navassa Island. Navassa Island is an uninhabited Caribbean island attracting Haitian fisherman and campers. It is administered by the U.S. Coast Guard. Howland and Jarvis Islands. These Pacific islands are designated wildlife refuges under jurisdiction of the Department of the Interior.