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Can you get war insurance?

By Leroy Cleveland - May 15, 2022

As someone who lives less than 30 minutes from Washington, DC, our Nation’s Capital, I wonder what would happen should the United States be attacked right here on our own soil; especially with all of the violence we’re seeing in Ukraine.

Moreover, what if my job sent me to Poland, Hungary, or China, regions that are more vulnerable than usual today due to their location and/or the political climate

210818-D-BN624-0120 | Army Gen. Mark A. Milley, chairman of … | Flickr
“… The potential for significant international conflict between great powers is increasing, not decreasing.”

Shortly after Russia attacked Ukraine, Army Gen. Mark A. Milley, the Chairman of the Joint Chiefs of Staff and highest-ranking American in the military, told the House Armed Services Committee that the world is getting more unstable, “… And the potential for significant international conflict between great powers is increasing, not decreasing.”

Americans who live in close proximity to a large city or military complex should be at least a little concerned about their lives and property.

Enter insurance.

Your typical life, home, and auto insurance policies don’t cover war-related events. In fact, most policies contain war exclusion clauses that claim the insurer is not required to pay for losses caused incurred by war-related events. However, war risk insurance exists and can be used for very specific business purposes, such as for people who are in or travel to high-risk areas of the world or have businesses in those places,

“Companies operating in politically unstable parts of the world are more exposed to the risk of loss from acts of war. War risk insurance may cover kidnappings and ransom, sabotage, emergency evacuation, worker injury, and loss or damage to property, cargo, supply chain,” says Janet Ruiz, a spokeswoman for the Insurance Information Institute via PolicyGenuis.com.

“Aviation and maritime industries tend to have more specific war insurance options available to them,” says Ruiz. Some countries require airlines to secure war risk coverage before they enter their airspace or use their airports.

So why don’t most insurance policies cover losses caused by war?

The Insurance Information Institute considers war fundamentally uninsurable, insisting it’s impossible for insurers to accurately calculate risk and charge a fair premium for events so unpredictable and potentially catastrophic.

Moreover, the potential volume of claims for wartime losses would make it financially impossible for insurers to keep their businesses afloat.

Workers’ compensation, which covers employees who are injured or killed while on the job, is the only traditional insurance policy that does not contain war exclusions.

Can you attain war risk insurance?
Sans worker’s compensation, don’t expect to attain war risk insurance if you’re not traveling or don’t have business assets overseas.

“Acts of war are usually excluded under homeowner/renter/auto personal insurance policies and considered uninsurable due to the expensive nature of such coverage,” Ruiz added.

That stated, if you own a business or work for a business in a region that’s considered volatile, it’s worth looking into war risk insurance policies. Shipping companies, airlines, and businesses that operate or travel to high-risk countries may be eligible to purchase war risk insurance.

What about terrorism coverage?
Acts of terrorism fall into a different category than acts of war and may be covered by your existing insurance policies because they are without specific “war-related” exclusions.

“Victims of the Sept. 11, 2001 terrorist attacks received more than $38 billion in compensation — a figure 30 times the size of the largest previous disaster payout — and one that is unlikely to be matched, says a Rand Corporation study… “
 LA Times

Call your insurer to find out what unexpected events you’re covered for in the event of a war-time disaster.


Tags: insurance, war in ukraine