Knowing what your home insurance plan excludes is as important as what it includes. Here are some unlikely, but not impossible, scenarios where coverage may not exist.
1. Protests and riots
In countries where protests are common, the possibility of riots is high. Some recent incidents include the 2014 Vietnam anti-Chinese protest and the 2009 Ürümqi riots, which led to the destruction of many buildings and the loss of countless lives. Collateral damages to properties may not be covered, along with losses from any theft that may have occurred during such incidents.
2. Land disputes
In almost every country, the government has the authority to acquire land for the greater benefit of the public. Some examples include the building of roads, schools, and other public infrastructure. This can pose a huge problem for landlords and residents. In countries like Cambodia, Vietnam, and Myanmar, thousands of people face eviction from their homes but are powerless to prevent it. While insurance with political risk coverage do exist, they are mostly reserved for businesses looking to protect their assets.
3. Nuclear accidents
Up till now, many are still dealing with the aftermath of the horrific Fukushima Daiichi nuclear disaster that happened in 2011. It was immediately classified as a Level 7 event, which is the maximum classification on the International Nuclear Event Scale (similar to the magnitude scale that measures earthquakes). Thousands of homes were left uninhabitable, and families had nowhere to go. Coverage is not provided in such cases as insurers simply do not have adequate assets to pay for accidents of such an extreme scale.
Sounds unlikely? Not quite. In today’s politically charged climate, anything can happen. The friction between the leaders of America and North Korea is one good example, with the threat of war being thrown around carelessly. If you’re living in a country that is constantly involved in tense political discussions with other countries, the possibility of war arriving on the shores of your homeland can be very real. The potential loss incurred from damages is so astronomical that insurers will not be able to handle it—which is why home insurance often excludes war from their coverage.