War Exclusion Clause

A A A

DEFINITION

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

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 II to provide ...
  2. War Risk Insurance

    A policy that provides financial protection against losses sustained from occurrences ...
  3. War Risk

    1. The possibility that an investment will lose value because of a major, violent ...
  4. War Economy

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

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

    Debt securities issued by a government for the purpose of financing military ...
  7. War Chest

    A colloquial term for the reserves of cash set aside or built up by a company ...
  8. Reinsurer

    A company that provides financial protection to insurance companies.
  9. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all of the plan’s ...
  10. Death Master File (DMF)

    Also known as Social Security Death Index. A list of people whose deaths were ...
Related Articles
  1. War's Influence On Wall Street
    Bonds & Fixed Income

    War's Influence On Wall Street

  2. Introduction To The Continuing Claims ...
    Professionals

    Introduction To The Continuing Claims ...

  3. Permanent Life Policies: Whole Vs. Universal
    Options & Futures

    Permanent Life Policies: Whole Vs. Universal

  4. Insuring A Credit Card Against Job Loss
    Options & Futures

    Insuring A Credit Card Against Job Loss

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

    How An Insurance Company Determines ...

  6. Choosing The Best Disability Insurance ...
    Options & Futures

    Choosing The Best Disability Insurance ...

  7. What protects an investor’s interest ...
    Investing

    What protects an investor’s interest ...

  8. Life Insurance Clauses Determine Your ...
    Home & Auto

    Life Insurance Clauses Determine Your ...

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

    A New Approach To Long-Term Care Insurance

  10. What's the difference between Social ...
    Retirement

    What's the difference between Social ...

comments powered by Disqus
Hot Definitions
  1. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  2. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  3. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
  4. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico and Philippines.' Similar to BRIC (Brazil, Russia, India and China), the acronym was coined by and investor/economist to group fast-growing emerging market economies in similar states of economic development.
  5. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all of the plan’s risk – e.g.: retirement payment liabilities to former employee beneficiaries. The plan sponsor can do this by offering vested plan participants a lump-sum payment to voluntarily leave the plan, or by negotiating with an insurance company to take on the responsibility for paying benefits.
  6. XW

    A symbol used to signify that a security is trading ex-warrant. XW is one of many alphabetic qualifiers that act as a shorthand to tell investors key information about a specific security in a stock quote. These qualifiers should not be confused with ticker symbols, some of which, like qualifiers, are just one or two letters.
Trading Center