Do you need war risk insurance?

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Russia’s invasion of Ukraine has raised the specter of a greater global conflict. Whether or not the war remains localized, the citizens and organizations caught in the middle could sustain catastrophic losses.

If you’re wondering whether you need insurance coverage to protect against losses caused by war, you should know that most common insurance policies specifically exclude war as something they cover. While there is such a thing as war risk insurance, it’s generally only suitable for very specific business purposes.

Does your insurance policy cover losses caused by war?

War can cause untold losses to human life and property — the types of losses that are typically covered by policies like homeowners, renters, auto, and life insurance. But most of these policies contain war exclusion clauses that say the insurer is not required to pay for losses caused by war-related events.

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According to the Insurance Information Institute, war is considered fundamentally uninsurable because it is nearly impossible for insurers to accurately calculate risk and charge a fair premium for such an unpredictable event. In addition, the volume of claims that could be filed for wartime losses would make it financially impossible for insurers to stay in business.

Workers compensation, which covers employees who are injured or killed while on the job, is the only traditional insurance policy that does not contain war exclusions.

What is war risk insurance?

War risk insurance is a type of policy that does cover losses caused by war, but it’s mainly geared toward businesses and individuals who work in or travel to high-risk areas of the world. General war risk insurance policies may cover war-related losses including damaged business assets like office buildings and property or lost income if operations are shut down.

“Companies operating in politically unstable parts of the world are more exposed to risk of loss from acts of war. War risk insurance may cover kidnappings and ransom, sabotage, emergency evacuation, worker injury, and loss or damage to property, cargo, supply chain,” says Janet Ruiz, a spokeswoman for the Insurance Information Institute.

There are also war risk insurance policies created specifically for businesses in the aviation and maritime industries. For example, a shipping company may wish to purchase war risk liability insurance, which covers the people and property on a shipping vessel, and war risk hull insurance, which covers damage or losses to the vessel itself. Covered losses may include damage to property, loss of life, and business losses in the event the ship is damaged, sunk, seized, or detained.

“Aviation and maritime industries tend to have more specific war insurance options available to them,” says Ruiz. Some countries require airlines to secure war risk coverage before they enter their airspace or use their airports.

High-risk travel insurance can provide coverage when you or your employees travel to war zones or high-risk countries as part of the job. These travel policies may cover losses like accidental death and dismemberment, kidnap and ransom, and more. The basic travel insurance provided by your credit card probably won’t cover these types of scenarios.

Do you need war risk insurance?

With the exception of worker’s comp, the average person who has insurance for their life, car, or home probably won’t be covered in the event of war, says Ruiz. “Acts of war are usually excluded under homeowner/renter/auto personal insurance policies and considered uninsurable due to the expensive nature of such coverage.”

If you own a business or work for a business where war is a realistic threat, it’s worth looking into war risk insurance policies. Shipping companies, airlines, and businesses that operate or travel to high-risk countries may be eligible to purchase war risk insurance.

What about terrorism coverage? It’s important to note that acts of terrorism are categorized differently than acts of war, and may be covered by your existing insurance policies as there aren’t usually specific exclusions like there are for war. Check with your insurer to find out what unexpected events you’re covered for in the event of a disaster.

This article originally appeared on Policygenius.com and was syndicated by MediaFeed.org.

More from MediaFeed:

These 2 Western cities are the most financially fit in the US

 

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

Financial fitness has little or nothing to do with how much you spend on gym memberships each month. But there are plenty of ways to measure financial fitness, from monitoring personal bill-paying activity to tracking cost of living regionally.

 

LendingTree researchers devised financial fitness scores for the 100 largest U.S. metros, taking into account five individual factors (such as the percentage of income that goes toward owning or renting a home and the percentage of people with at least one maxed-out credit card) and four community factors (such as unemployment rates and real personal income).

 

Two Utah metros come out at the top, while the two largest metros in the U.S. come out at the bottom. Here’s what else researchers learned.

 

AaronAmat / istockphoto

 

  • Utah steals the show when it comes to financial fitness, with Ogden and Provo taking the first and second spots with final scores of 81.4 and 77.5, respectively. Salt Lake City makes a respectable showing at No. 8 with a final score of 70.2.
  • Madison, Wisconsin rounds out the top three, with a final score of 76.5. Madison has one of the lowest unemployment rates — 3.5% — across the 100 metros examined.
  • The two largest metros in the U.S. — New York and Los Angeles — finish at the bottom, with financial fitness scores of 32.5 and 34.6, respectively.
  • McAllen, Texas, comes in third to last with a final score of 36.3. Despite being the cheapest place to live, this Texas metro has the lowest real personal income and the highest unemployment rate, so it’s no surprise that personal struggles with bills and debt follow.

 

Deposit Photos

 

LendingTree analysts scored the 100 largest metropolitan statistical areas (MSAs) across two categories — community score and individual score — to determine the overall financial fitness of those MSAs.

 

These two scores were averaged to create a final score, upon which the MSAs were ranked from highest to lowest. The highest possible scores for each category and the final score was 100, and the lowest was zero.

 

Each metric was first scored according to its relation to the best value (100 points) and the worst value (0 points) among the metros. These metrics were then averaged according to the weights below to create the category score. The final score was equally weighted between the community and individual scores.

 

In addition to publicly available sources, researchers reviewed more than 300,000 anonymized credit reports of LendingTree app users. The composite metrics represent the latest data available.

 

nortonrsx/ istockphoto

 

  • Final Score: 59
  • Community Score: 56.6
  • Individual Score: 61.4

 

 

DepositPhotos.com

 

  • Final Score: 59
  • Community Score: 55.9
  • Individual Score: 62

 

 

DepositPhotos.com

 

  • Final Score: 59.2
  • Community Score: 51.6
  • Individual Score: 66.8

 

 

DepositPhotos.com

 

  • Final Score: 59.7
  • Community Score: 58.3
  • Individual Score: 61.1

 

 

DepositPhotos.com

 

  • Final Score: 59.7
  • Community Score: 59.6
  • Individual Score: 59.8

 

 

Arrangements-Photography/istockphoto

 

  • Final Score: 60.7
  • Community Score: 61.4
  • Individual Score: 60

 

 

Kruck20 / istockphoto

 

  • Final Score: 60.8
  • Community Score: 51
  • Individual Score: 70.6

 

 

tonda / istockphoto

 

  • Final Score: 60.9
  • Community Score: 49.5
  • Individual Score: 72.2

 

 

DepositPhotos.com

 

  • Final Score: 60.9
  • Community Score: 50.2
  • Individual Score: 71.6

 

 

DepositPhotos.com

 

  • Final Score: 61
  • Community Score: 52.6
  • Individual Score: 69.3

 

 

DepositPhotos.com

 

  • Final Score: 61.2
  • Community Score: 57
  • Individual Score: 65.4

 

 

felixmizioznikov /istockphoto

 

  • Final Score: 61.9
  • Community Score: 56.2
  • Individual Score: 67.6

 

 

BSPollard/istockphoto

 

  • Final Score: 62.6
  • Community Score: 53
  • Individual Score: 72.2

 

 

aiisha5 / istockphoto

 

  • Final Score: 62.7
  • Community Score: 61.7
  • Individual Score: 63.6

 

 

Johnny Warrior / istockphoto

 

  • Final Score: 62.9
  • Community Score: 59.3
  • Individual Score: 66.5

 

 

istockphoto

 

  • Final Score: 63.3
  • Community Score: 62.3
  • Individual Score: 64.3

 

 

DepositPhotos.com

 

  • Final Score: 63.3
  • Community Score: 60
  • Individual Score: 66.5

 

 

RoschetzkyIstockPhoto / istockphoto

 

  • Final Score: 63.4
  • Community Score: 64.8
  • Individual Score: 61.9

 

 

istockphoto/Vito Palmisano

 

  • Final Score: 63.4
  • Community Score: 55.8
  • Individual Score: 70.9

 

 

Kruck20 / istockphoto

 

  • Final Score: 63.7
  • Community Score: 57.3
  • Individual Score: 70.1

 

 

Jacob Boomsma / istockphoto

 

  • Final Score: 64.1
  • Community Score: 63.3
  • Individual Score: 64.8

 

 

©TripAdvisor

 

  • Final Score: 64.3
  • Community Score: 55.3
  • Individual Score: 73.2

 

 

DepositPhotos.com

 

  • Final Score: 64.4
  • Community Score: 56.6
  • Individual Score: 72.2

 

 

Deposit Photos

 

  • Final Score: 64.5
  • Community Score: 61
  • Individual Score: 68

 

 

DepositPhotos.com

 

  • Final Score: 64.7
  • Community Score: 56.8
  • Individual Score: 72.5

 

 

Sean Pavone / istockphoto

 

  • Final Score: 64.8
  • Community Score: 62.2
  • Individual Score: 67.3

 

 

istockphoto/alexeys

 

  • Final Score: 65.2
  • Community Score: 60.9
  • Individual Score: 69.4

 

 

Nicholas Smith / istockphoto

 

  • Final Score: 65.5
  • Community Score: 55
  • Individual Score: 75.9

 

 

DepositPhotos.com

 

  • Final Score: 65.8
  • Community Score: 61.7
  • Individual Score: 69.8

 

 

DepositPhotos.com

 

  • Final Score: 66
  • Community Score: 61.1
  • Individual Score: 70.8

 

 

Deposit Photos

 

  • Final Score: 66.1
  • Community Score: 57.1
  • Individual Score: 75

 

 

benkrut / istockphoto

 

  • Final Score: 66.9
  • Community Score: 60.7
  • Individual Score: 73

 

 

SeanPavonePhoto / istockphoto

 

  • Final Score: 67
  • Community Score: 62.1
  • Individual Score: 71.8

 

 

DepositPhotos.com

 

  • Final Score: 67.6
  • Community Score: 58.4
  • Individual Score: 76.7

 

 

KarolinaBorkowski/istockphoto

 

  • Final Score: 67.7
  • Community Score: 54.4
  • Individual Score: 81

 

 

istockphoto/StellaMc

 

  • Final Score: 68.1
  • Community Score: 61.4
  • Individual Score: 74.8

 

 

istockphoto

 

  • Final Score: 68.2
  • Community Score: 64
  • Individual Score: 72.3

 

 

Davel5957/istockphoto

 

  • Final Score: 69.1
  • Community Score: 63
  • Individual Score: 75.2

 

 

f11photo / istockphoto

 

  • Final Score: 69.2
  • Community Score: 59.8
  • Individual Score: 78.5

 

 

Sean Pavone / istockphoto

 

  • Final Score: 69.4
  • Community Score: 63.5
  • Individual Score: 75.3

 

 

DepositPhotos.com

 

  • Final Score: 69.9
  • Community Score: 64.4
  • Individual Score: 75.4

 

 

DepositPhotos.com

 

  • Final Score: 69.9
  • Community Score: 61.9
  • Individual Score: 77.9

 

 

aceshot / istockphoto

 

  • Final Score: 70.2
  • Community Score: 72.3
  • Individual Score: 68

 

 

DepositPhotos.com

 

  • Final Score: 70.8
  • Community Score: 69.8
  • Individual Score: 71.7

 

 

dangarneau / istockphoto

 

  • Final Score: 71.6
  • Community Score: 72.5
  • Individual Score: 70.6

 

 

Deposit Photos

 

  • Final Score: 72
  • Community Score: 65.1
  • Individual Score: 78.8

 

 

traveler1116/istockphoto

 

  • Final Score: 73.2
  • Community Score: 64.7
  • Individual Score: 81.6

 

 

Sean Pavone/istockphoto

 

  • Final Score: 76.5
  • Community Score: 73.1
  • Individual Score: 79.8

 

 

DepositPhotos.com

 

  • Final Score: 77.5
  • Community Score: 75.6
  • Individual Score: 79.3

 

 

DenisTangneyJr/istockphoto

 

  • Final Score: 81.4
  • Community Score: 81.8
  • Individual Score: 80.9

 

 

Scott Catron from Sandy, Utah, USA

 

Location can certainly help you maintain financial fitness, but your personal habits will follow wherever you go, so make sure yours are helping you meet your financial goals.

 

 

Rawpixel / istockphoto

 

Achieving overall financial fitness often means addressing several different problem areas. Maybe you don’t have credit card debt but you struggle to keep a solid emergency savings.

 

“Knowing what you want most from your money is the vital first step,” LendingTree chief credit analyst Matt Schulz said. “You have to know where you want to go before you can figure out how to get there.”

 

Cn0ra / istockphoto

 

Once you’ve identified your goals, you’ll want to lay out a plan of how to achieve them.

 

“If you don’t know exactly how much money is coming in and going out of your household each month, it’s really tough to make a meaningful plan for your financial future,” he said.

 

Lyndon Stratford / istockphoto

 

Life can often impede on your budget, whether that means a sudden loss of income or another major unexpected expense. Financial fitness won’t stop those things from happening, but it can help mitigate the effects if you’re consistently working to improve your situation.

 

“Financial fitness is about good habits done over a long stretch of time,” Schulz said. “It is absolutely a marathon rather than a sprint.”

 

Pexels.com

 

You might not think taking out a personal loan can help you get out of debt, but Schulz said debt consolidation loans can work for people juggling multiple payments.

 

“Not only can it knock down your interest rate, it can streamline your payments,” he said. “Instead of dealing with three or four different creditors, you can consolidate them into one loan, make one single payment and simplify your financial life tremendously.”

This article
originally appeared on 
LendingTree.comand was
syndicated by
MediaFeed.org.

 

istockphoto/Ridofranz

 

 

Deposit Photos

 

Featured Image Credit: SolisImages / istockphoto.

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