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Monday, Nov 23, 2015

Does your policy cover you against terror attacks?

   [Source : The Economic Times]

The Paris terror attacks, followed by the Ministry of Home Affairs admitting the possibility of similar strikes in India have put the spotlight on insurance against terrorism-related incidents.

"The incident could prompt travellers to recognise the importance of travel insurance, even when they are going to countries where it is not mandatory," says Nikhil Apte, Chief Product Officer, Product Factory (Health Insurance), Royal Sundaram Alliance Insurance.

Travel insurance is compulsory for a Schengen visa, which covers 26 European nations, including France. "After the recent attacks, travel insurance has become all the more important as it provides you financial cover and peace of mind if you get caught in volatile situations," says Naval Goel, CEO and Founder, PolicyX.com, an insurance aggregation portal.

Insurers distinguish between war, riots and terrorism. The latter is defined as an act of violence that causes loss of life and property where perpetrators belong to groups that seek to weaken control of established governments. Life, health, personal accident and home insurance too are likely to attract more interest. "Insurance seekers are evaluating policies on the basis of their comprehensiveness.

For instance, several high-end health covers pay for evacuation from primary care centres to hospitals of insured's choice in case of emergencies," says Apte. When you seek insurance against terror strikes, you need to read the fine print to understand the scope of coverage and the items that the company will not pay for before you buy a cover. Travel insurance Many travel insurance policies cover listed expenses arising out of terror attacks.

"All risks like trip cancellation, loss of passport, medical expenses, repatriation of remains etc are covered as part of the regular travel policy even if they result from terrorism," says Sanjay Datta, Chief, Underwriting and Claims, ICICI Lombard General Insurance. Your accommodation expenses will also be reimbursed if you have to extend your stay due to an emergency. Depending on the variant chosen, the company will also pay for your journey back home and visit from a relative on compassionate grounds.

However, you need to go through the policy documents in detail before signing up for one as some companies may not pay for risks emanating from terrorism. For example, Tata-AIG specifically mentions terrorism as an exclusion in its travel policy, though it covers flight hijacking. Besides, even in policies that provide insurance against terror, insurers will not admit claims if policyholders visit destinations that are known to be facing such risks or knowingly violate safety regulations.

For instance, if a policyholder were to suffer injuries after venturing out despite instructions from Paris authorities to stay indoors, the claim could come under a cloud. "You also need to figure out whether the coverage applies only to a city that is specifically on your itinerary, or also extends to the other cities or to the country as a whole," adds Kumar. Health insurance Terrorism-related medical emergencies fall under the ambit of health insurance coverage.

"Hospitalisation expenses of victims of terrorist attacks are covered as they fall under accidental injuries. The insured would also be covered for pre and post-hospitalisation and ambulance expenses as well as other expenses as per the policy coverage," says Sasikumar Adidamu, Chief Technical Officer, Non-Motor, Bajaj Allianz General Insurance.

This apart, several higher-end health covers today cover medical emergencies across the world, and not just India as was the case earlier. "Moreover, insurers have tie-ups with agencies that can facilitate evacuation from the crisis location to a safer place. They can also organise air ambulance to transport the victim from primary care centres to hospitals of their choice," says Apte.

Before travelling abroad, do take a look at your policy wordings to ascertain whether it will extend to countries other than India. Personal accident insurance Such covers compensate the policyholders for disabilities suffered due to accident or the nominees in case of the former's death.

""Domestic personal accident policies will cover death due to accidents, including terror attacks, whether in India or abroad," says Apte. However, medical expenses linked to biological, chemical or nuclear terror attacks are usually not covered. Home insurance While some home insurance policies like New India's product come with an in- built terror cover, several others offer it as an add-on cover requiring a minimum extra premium of Rs 80-100.

This terror insurance component covers damage directly caused by attackers and loss incurred during counter-terror action. Again, you need to go through the terms and conditions before zeroing in on a policy. "Home insurance does not cover for loss arising out of burglary, house-breaking, looting or theft that occur after an act of terrorism," says Adidamu. Life insurance The policyholder's dependents will be entitled to life insurance proceeds upon his or her death in a terror attack.

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