In India, insurance policies across all major categories—life, property, health and personal accident—uniformly exclude coverage for war-related incidents. This industry-wide practice stems from the immense and unpredictable nature of war, which insurance companies regard as a systemic risk beyond the scope of standard underwriting.Click here for India-Pakistan Ceasefire LIVE updates“In India, insurance coverage generally excludes non-natural/manmade force majeure events like acts of war, political unrest, terrorism, invasion, civil war, rebellion, or insurrection etc. as exclusions and damage or loss caused directly or indirectly by potentially catastrophic and unpredictable losses is not generally insured,” Anjali Jain, Partner, Areness Law told Firstpost.STORY CONTINUES BELOW THIS AD“War insurances are common in marine or aircraft or other international trades as Indian insurance industry typically relies on NMA 464 i.e. the War and Civil War Exclusion Clause which exclude coverage for losses or damages caused by war, invasion, acts of foreign enemies, civil war, and other similar events. Even in 26/11 attacks, the said clause was effectively invoked by insurance providers and it was echoed that damages caused by any terrorist organisation are too great to be covered by any general policy,” she said.More from India
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Bharindwal explained that this applies not only to armed forces but also to civilians, particularly if the death occurs in a conflict zone or due to hostilities. He pointed out that even fully paid-up policies can be rendered void if the insured dies in circumstances traceable to war-related activities.Sandeep Katiyar, co-founder and CFO of Finhaat told the business daily, further clarified that claims can be rejected if the death results from being present in a high-conflict zone, even without active involvement. He explained that in cases where an Indian expatriate living in the Middle East passes away due to natural causes, such as a heart attack and the death is not connected to any ongoing conflict, the insurance claim could still be processed—assuming the policy does not restrict coverage based on location.Property insurance: Limited scope in hostile situationsWhen it comes to property insurance, the exclusions are equally clear. As explained by Sanjay Radhakrishnan, CEO of Edme Insurance Brokers to The Times of India, standard fire and allied perils policies in India do not provide any compensation for property damage caused by acts of war, invasion, or civil commotion escalating into a war-like situation. He said shortly after India carried out Operation Sindoor, insurers began receiving inquiries about war risk cover. However, underwriters were reluctant to provide such coverage for landed properties once hostilities had begun, since the situation was already considered proximate to war.Radhakrishnan noted that although cargo insurance can include war risk—provided it is limited to the time goods are in transit—this must be purchased through a special endorsement and for an additional premium. Amarnath Saxena, chief technical officer at Bajaj Allianz General Insurance told The Time of India that war risk coverage is closely tied to the reinsurance market. He pointed out that during wartime, reinsurers may suspend treaties or withdraw coverage entirely, leading to inflated premiums and reduced availability, particularly for marine cargo.STORY CONTINUES BELOW THIS ADHealth and personal accident insurance: Exclusions across the boardHealth and personal accident insurance policies in India also systematically exclude coverage for injuries or fatalities resulting from war or war-like operations. Katiyar emphasised that these exclusions apply uniformly, whether the insured is a civilian or not. He advised that policyholders must carefully review their documents for terms such as “acts of war,” “civil commotion,” or “terrorism,” which often signal non-compensable scenarios. According to The Times of India, insurers offer very few, if any, standard products that provide relief in such cases unless a highly customised plan is arranged in advance.Specialised coverage: War risk as a separate classDespite these exclusions, the industry does offer specialised insurance products for high-risk circumstances. War-related coverage is typically found in specialised insurance products, particularly within the aviation and maritime industries. Radhakrishnan explained that while landed property remains difficult to insure once conflict begins, cargo in transit can still be protected through endorsements, albeit at higher premiums.Saxena highlighted that insurers rely heavily on reinsurance arrangements to support these specialised products. If global reinsurers, such as those influenced by the London-based Joint War Committee (JWC), mark a region as high-risk, insurers may either cancel existing war risk policies or revise their terms, typically with a seven to thirty-day notice period. These updates are routine during periods of heightened geopolitical tension and directly affect the availability and pricing of war-related coverage for commercial clients.For members of the armed forces, public sector entities like the Life Insurance Corporation or dedicated military branches offer group insurance plans that include protection against war-related risks. Bharindwal noted that such plans are not available to civilians.However, some corporate policies in sectors like oil and gas, diplomacy, or international media can be tailored to include group accident or life insurance with specific war-related provisions. High-risk travel plans offered by companies such as Tata AIG and ICICI Lombard may also include terrorism cover under health or accident policies, though not under life insurance.STORY CONTINUES BELOW THIS ADGiven the wide-ranging exclusions, experts urge policyholders to thoroughly examine their insurance documents. Katiyar recommended that individuals pay attention to territorial limits, optional add-ons like accidental death riders and the presence of terrorism coverage.What happens in Israel and UkraineIn Israel, the protection of household belongings against war-related damage is established under the Property Tax and Compensation Fund Law of 1961 and its accompanying regulations.According to this legislation, the State of Israel undertakes the responsibility to compensate its citizens and residents for direct and indirect damages caused by acts of hostility or wartime operations. This state-guaranteed insurance applies to all citizens and residents who are in their place of residence at the time of damage, and it is provided automatically and free of charge.Under this legal framework, household items are insured against war-related damage up to specific maximum amounts determined by the type of item. This basic level of coverage ensures that all residents receive a minimum degree of financial protection for personal belongings damaged in times of conflict.However, the law also allows residents to extend the coverage beyond the default limits if they wish to insure their possessions at a higher value. This extension is optional and subject to an annual application process, which must be completed by December 31 each year.STORY CONTINUES BELOW THIS ADNot all items are eligible for coverage under the state insurance scheme. Certain high-value or non-standard items—such as artwork, jewellery, antiques, and cash—are explicitly excluded and cannot be insured by the state for war-related damage under any circumstances.For those choosing to increase their household insurance coverage, the additional premium is calculated at a rate of 0.3 per cent of the added value they wish to insure. However, there is a statutory limit on this extension, with the total additional insured value capped at 979,624 ILS (Israeli Shekel). Once the application is completed, residents are guided to the payment stage to finalise the process and activate the enhanced coverage.Similarly in Ukraine. the CMS Law report titled War Damage in Ukraine: All You Need to Know to Obtain Compensation, published in May 2022, provides a comprehensive overview of the legal avenues available to Ukrainian citizens seeking compensation for damages resulting from the Russian invasion.STORY CONTINUES BELOW THIS ADAccording to the report, as of May 2, 2022, Ukraine had suffered losses amounting to approximately $600 billion due to the war, with direct damage to property and infrastructure estimated at $92 billion. The World Bank, on April 22, 2022, estimated physical damage at roughly $60 billion.The report outlines the process for affected individuals to submit compensation claims through Ukrainian civil and criminal courts. In a significant legal development in April 2022, Ukraine’s highest court ruled that Russian state immunity would not apply to civil cases seeking compensation for war-related damages, thereby affirming the jurisdiction of Ukrainian courts to hear and adjudicate such claims against the Russian Federation.However, the report also notes challenges, including procedural and practical hurdles in pursuing claims against Russia in Ukrainian courts while martial law remains in effect and potential issues with Russia’s immunity from enforcement of court decisions in foreign jurisdictions.India’s insurance gap in times of conflictIn India, the war-related damages are not covered in the same manner as some other countries. It has been a matter of debate not only in India but around the world. The debate is only intensifying given the recent spike in geopolitical tensions in Europe, West Asia and East Asia.There have been calls for policy interventions but with insurance increasingly becoming a corporate decision, and a military conflict can cause damage of the extent (for example, in Ukraine or Gaza) that may push insurers to bankruptcy. However, Israeli and Ukrainian models could be improved upon to offer general protection to people living in geographies that are vulnerable to geopolitical or bilateral tensions.STORY CONTINUES BELOW THIS ADTagsIndiaJammu and KashmirKashmirPakistanEnd of Article
Originally posted here:
India-Pakistan conflict: Why India needs new insurance rules for times of war
