Travel insurance is designed to protect travellers from unexpected risks during their journey, from medical emergencies and accidents to baggage loss and trip delays.
For international travellers it acts as a financial safety net by covering emergency hospitalisation abroad, trip interruptions due to personal emergencies, loss of passport or baggage and travel delays and missed connections
However, during geopolitical crises, such as the ongoing conflict in the Arabian peninsula involving Iran, the US and its allies, travel insurance begins to show its limitations.
Standard travel insurance policies are built around personal, unforeseen events, not global disruptions.
Covered:
Not covered:
One of the immediate effects of the ongoing conflict has been restricted access to new travel insurance policies. Recent industry developments indicate that:
This is because insurers assess risk at the time of issuing a policy. When a region becomes high-risk due to war or conflict, insurers may:
In simple terms, insurance becomes harder to buy precisely when risk is highest.
Insurance works on the principle of predictable risk pooling. War disrupts this balance.
In conflict situations risks become uncertain and catastrophic. Losses can be widespread and simultaneous, and historical data becomes unreliable
As a result, insurers may choose to withdraw from underwriting such risks altogether, rather than expose themselves to unpredictable large-scale losses.
For travellers who already have travel policies, they may face rejected claims from their insurers.
Many travellers affected by flight cancellations, airspace closures, missed connections, and extended stays abroad are discovering that their insurance policies do not compensate these losses.
This might seem unfair, but let’s look at why insurers reject these claims.
The key concept that determines claim outcomes in such situations is “proximate cause.” In insurance, proximate cause refers to the primary or dominant cause of a loss, not just the immediate event.
For example, your flight is cancelled, and this might be the immediate cause for your suffering a financial loss, but the underlying reason is war or airspace closure due to conflict which is the “proximate cause.”
If the proximate cause of the loss is a war or war-like situation, the claim will be denied, even if the actual loss appears unrelated. This principle ensures that insurers assess claims based on the root cause.
Due to standard war exclusions, the following are generally not covered:
Even indirect disruptions may be excluded if they can be traced back to war as the proximate cause.
Despite these exclusions, travel insurance still provides value in many situations. Policies still cover:
However, the scope of coverage becomes narrower during times of conflict.
In conflict situations, responsibility often shifts away from insurers. Travellers may need to rely on airlines forRefunds or rescheduling options and for alternate routing.
Travellers may even need to rely on government advisories for evacuation support and travel warnings affecting insurance validity.
If a traveller proceeds despite an official advisory against travel, insurance coverage may be reduced or voided for related claims.
To navigate times of geopolitical conflict and war, travellers should:
Travel insurance remains a valuable protection for travellers, but only when its coverage is clearly understood.
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