Insurance Law Lesson 56: War
Insurance is about accidents. But not all accidents. Sometimes there is no coverage even if the situation was 100% beyond your control. Under most policies, damage caused by war falls into this category. Standard liability and property policies do not include coverage for damage caused by war or “warlike acts” by military, including seizure by the military.
I have been fortunate to have never had this exclusion apply, nor have I ever advised an insurer to assert it as a coverage defense. We have not had a war on United States soil in quite some time. But what about terrorism? Is it war?
The 9/11 attacks were the single largest insured event in history. Low estimates but the insurance paid in connection with the attacks at over $30 billion. Others go as high as $70 billion. Nothing else has ever topped $20 billion. I’ve read that some insurers briefly tried the war exclusion, but ultimately it did not bar coverage.
As with the rest of country, 9/11 shook the insurance industry on many levels. Though not within the war exclusion, terrorism is typically also excluded from coverage unless such coverage is specifically purchased.