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 Insurance

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

    1. The possibility that an investment will lose value because ...
  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. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center