The war in West Asia, triggered after the United States-Israel strikes against Iran, have sent shockwaves across the world. The killing of Iran's supreme leader, Ayatollah Ali Khamenei, and Tehran's subsequent retaliatory attacks on Gulf Arab nations over the weekend have left residents and travellers in a state of uncertainty.
Explosions were heard in the United Arab Emirates, Bahrain and Qatar, where loud blasts sent residents rushing for cover. The disruption to the normal life of high-profile Gulf Arab cities like Dubai, otherwise seen as a symbol of security and luxury, have also raised a critical question about how well prepared citizens for such unprecedented risks are.
For years, oil and gas wealth in cities such as Abu Dhabi, Dubai and Doha has attracted millions of expatriate workers and tourists. However, the recent events have pushed people to also consider how factors like insurance and other precautionary measures play out in times of uncertainty.
Does Insurance Cover War Damage?
While insurance products for health, life, and property typically provide financial protection against accidents or illness, situations such as war are unprecedented and considered extreme events. As a result, large-scale attacks may require additional coverage and careful planning.
A typical insurance policy for property or health includes standard terms and often features a war exclusion clause. This clause specifies that the insurer will not cover any loss or damage resulting directly or indirectly from war, invasion, acts of foreign enemies, hostilities, civil war, or rebellion.
Consequently, any claims arising from war-related events are usually denied. This may leave policyholders without coverage for damages caused by large-scale geopolitical violence.
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What This Means For Life, Travel, Health, Property Cover?
If a property is damaged by enemy attacks or bombing during a conflict, a standard home insurance policy will likely not cover repairs. However, many insurers provide specialised policies for high-risk areas. Through these additional covers, homeowners can get extra protection by paying a higher premium.
Similarly, travel insurance can be extended with add-ons or riders to cover medical emergencies, evacuations, trip cancellations or interruptions caused by political unrest or terrorism.
For health insurance, hospitalisations arising from injuries sustained in war-like situations are usually not covered. This means that policyholders must cover these medical costs out-of-pocket unless they purchase a special policy or rider that specifically provides protection against such risks.
While other insurance products treat war-like situations as extraordinary incidents, life insurance plays out differently. Life insurance generally treats deaths from war or terrorist attacks the same as natural or accidental deaths. This means that in such cases, the nominee of the policyholder receives the full death benefit, including the sum assured and any accrued bonuses.
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