Home >Companies >Insurance cover? Not if you die in terrorist attack


New Delhi: As the country mourns the dead in the terror attacks in Mumbai and governments may announce compensation to the bereaved families - insurance claims may not really be settled easily - thanks to the ‘fine print´ and in fact, lack of a proper cover against terrorist violence.

A ‘terrorism insurance cover´ is not still present in the country, say experts.

However, they add that in most life insurance products, the basic sum assured may be offered to survivors in case of death of the insured due to ‘any reason´ other than suicide in the first year (of obtaining the policy).

“Unlike US and UK, we don’t have any insurance cover against ‘terrorist´ acts. Loss of life due to terror may fall in the category," says an official of Kotak Life Insurance.

Terrorism cover is offered by General insurance companies as an add-on policy with the fire insurance policy.

“After 9/11, most companies refused to give cover against acts of terrorism. General insurance companies then formed a pool and since then all premium collections done by the industry for this policy put into this pool," says Vineet Vidyarthi, Principal Officer, Almondz Insurance.

According to industry reports, non-life insurance companies were flooded with claims worth Rs1.3 crore, specifically on account of terror acts this year so far. During the previous year, the figure stood around Rs1 crore.

Vidyarthi says some time many insurance companies deny compensation on the ground citing the important points in the fine print covering terms and conditions.

“It happens that when the claimant goes to take the sum, insurer may point out some encircled ‘terms and conditions´ and blame the person of not going through them seriously, just to avoid the payment," he says.

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