Property, Life And Health: Does Your Insurance Cover Damages From War-Like Situations?

With tensions between India and Pakistan escalating, many people might already be reassessing their financial safety nets, particularly their insurance coverage. An important question in such uncertain times might be whether your insurance policy covers damages or claims arising from war or war-like situations.

As speculation about further escalation grows, concerns are mounting. While incidents of terrorism, such as the recent attack in Pahalgam, might fall outside the scope of travel insurance, what about damages caused by acts of war?

Here’s what you need to know.

The unfortunate reality is that most standard insurance policies — especially property or health — carry a war exclusion clause. This provision states that coverage does not apply to any loss or damage caused directly or indirectly by war, invasion, act of a foreign enemy, hostilities, civil war, rebellion, or insurrection. As a result, claims related to war damages are likely to be rejected by insurers.

For instance, if a property is damaged due to enemy action or bombing during a conflict, a standard home insurance policy won’t cover the cost of reconstruction or repair. But, specialised coverage tailored to high-risk zones is available and customers can opt for this extended coverage by paying an additional premium.

Similarly, for those with travel insurance, adding riders or add-ons can offer extra protection. These add-ons may provide coverage for medical emergencies, evacuations and trip cancellations, or interruptions resulting from political violence, terrorist incidents, or government-imposed travel restrictions.

When it comes to health insurance, hospitalisation due to injuries sustained in a war-like situation is also usually excluded under the war exclusion clause. Medical expenses arising from war-related injuries will likely need to be covered out-of-pocket unless you have a special policy or rider designed to cover such risks.

The life insurance companies treat deaths resulting from a terror attack or war similarly to natural or accidental death. The unfortunate death of a policyholder due to war or a terrorist attack will attract full protection under the existing life insurance policy. In such cases, the nominee or the legal heir of the policyholder is entitled to receive the full death benefit, like the total insurance amount with accrued bonus.

For the average civilian, the key is to thoroughly read your policy documents and understand what is excluded. In times of geopolitical uncertainty, it’s more important than ever to review your insurance coverage, clarify any doubts with your insurer and consider adding extra protections if necessary. Taking these steps can help ensure that you are adequately covered in case of unforeseen circumstances.