War Exclusion Clause

AAA

DEFINITION of 'War Exclusion Clause'

A clause in an insurance policy that specifically excludes coverage for acts of war such as invasion, insurrection, revolution, military coup and terrorism. A war exclusion clause in an insurance contract refers to protection for an insurer who will not be obligated to pay for losses caused by war-related events. Insurance companies commonly exclude coverage perils that they cannot afford to pay claims on.

INVESTOPEDIA EXPLAINS 'War Exclusion Clause'

Because most insurance companies would be unable to remain solvent, let alone profitable, if an act of war suddenly presented them with thousands or millions of expensive claims, auto, homeowners, renters, commercial property and life insurance policies often have war exclusion clauses. However, entities that are faced with a significant risk of war, such as companies located in politically unstable countries, may be able to purchase a separate war risk insurance policy.

RELATED TERMS
  1. War Damage Insurance Corporation

    A government financial protection arm created during World War ...
  2. War Risk

    1. The possibility that an investment will lose value because ...
  3. War Risk Insurance

    A policy that provides financial protection against losses sustained ...
  4. War Economy

    The organization of a country's production capacity and distribution ...
  5. War Babies

    A name given to securities in companies that are defense contractors. ...
  6. War Bond

    Debt securities issued by a government for the purpose of financing ...
Related Articles
  1. War's Influence On Wall Street
    Bonds & Fixed Income

    War's Influence On Wall Street

  2. How An Insurance Company Determines ...
    Home & Auto

    How An Insurance Company Determines ...

  3. A New Approach To Long-Term Care Insurance
    Home & Auto

    A New Approach To Long-Term Care Insurance

  4. Introduction To The Continuing Claims ...
    Professionals

    Introduction To The Continuing Claims ...

comments powered by Disqus
Hot Definitions
  1. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  2. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  3. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  4. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  5. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  6. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
Trading Center