Home Insurance: During the war between India and Pakistan, houses were damaged in many places. In such a situation, the question arises that if the house is damaged in the war, will the insurance companies pay for it? This question is especially troubling the people living in border areas, where there is a high risk of damage due to war.
Experts believe that the answer to this question is quite complex. However, the insurance industry’s stance is clear, ‘war’ or any situation related to it is outside the scope of insurance cover.
Why are claims related to ‘war’ rejected in insurance policies?
Home insurance policies in India usually clearly state that losses due to ‘war, foreign aggression, military action or rebellion’ will not be covered under insurance. The definition of ‘war’ is also very broad, “war, invasion, activity of foreign enemies, declared or undeclared war-like situations, civil war, rebellion, military revolt or illegal occupation of power.” According to experts, by making the definition of war so broad, insurance companies want to avoid those unusual and widespread risks that can neither be easily measured nor insurable.
What options do people in border areas have?
There is no ‘war-risk underwriting’ model for real estate or residential property yet, as is seen in aviation or marine insurance. Since airplanes and sea vessels are used in war, companies provide them such insurance coverage that covers war, invasion, military conflict or related risks. But experts say that extending the insurance policy for such a risk is neither practical nor do the current laws allow it.
Are terrorist attacks covered?
Insurance policies have the option of a separate add-on cover for terrorist incidents. If you add ‘terrorism coverage’ while buying the policy, you can get a claim if the house is damaged by a terrorist attack.
But this is also a very complicated matter. For example, if the damage is caused by an attack by the army of a country, it will come under the category of ‘war’ and not terrorism. In this situation, the insurance company can reject the claim.
Some limited options for ‘political violence’
Some insurance companies specifically provide political violence or civil commotion cover, such as riots, breaking shops and houses or burning them. However, this option is available only in select policies.
In such a situation, the entire responsibility of gathering the necessary documents for making a claim lies on the customer. In this, media evidence is also required along with technical evaluation. The insurance customer may have to provide everything like police FIR, photos, repair estimates and bills. They have to confirm the government riot from a newspaper, news channel or government notification.
What should home owners in border areas do?
It is still not possible for insurance companies to cover war and related losses. In such a situation, border citizens need to be alert, because in case of war, insurance may not stand with you.
However, it is possible that the government may later provide financial help during relief and rehabilitation. In such a situation, you should keep all the documents, bills and photos safe. You can review your existing insurance policy closely and ask the insurance company if any additional coverage is available. If yes, you can take advantage of it. Or you can also consult a financial expert.
