Military operations in Ukraine caught not only citizens, but also business structures by surprise. Since the beginning of the invasion of Russian troops, none of the insurance companies has dared to undertake compensation for losses that occurred against the background of hostilities. But time passed, and participants of the insurance market had to adapt to the new realities that exist for the third year in a row. The reorientation also arose in connection with the high demand for these services among private individuals, enterprises and campaigns, because in a country where military operations are taking place, protection against risks is extremely important.
How did a new product appear in the roar of insurance services – “war risk insurance”? How to choose the insurance company that will really help without risking your wallet and nerves? What legal nuances should be taken into account? Specialists of the “Repeshko and Partners” Bar Association comment on these issues.
According to some estimates, as of April 1, 2024, there were about 100 insurance companies operating in the non-bank market. The first and main question that arises before a citizen or a legal entity who has decided to insure their property or health is which insurance campaign is better to contact, how to choose the one that will pay compensation with the maximum speed and comfort in the future?
The simplest recommendation is the following. If problems begin with the insurance company and it refuses to pay insurance benefits, or pays them insufficiently, with significant delays, everything always ends with going to court with a claim against the insurance company for the collection of insurance benefits. It is possible to find out how often and for what sums claims are filed and for which insurance campaigns Unified state register of court decisions. There is no need to go to those insurance companies that appear in the register as defendants in the case most often.
In addition, there are a number of specialized analytical organizations that provide an independent assessment of the ability and readiness to fulfill the obligations regarding the payment of insurance indemnities by each specific insurance company. Ratings compiled by such organizations are widely available on the Internet, and for each year separately. Insurance companies that lead such ratings, and for many years in a row, are also considered reliable participants in the insurance market.
It is also necessary to pay attention to the period during which the insurance company is on the market of insurance services. The longer this period, the better, because it means that for many years this company will be trusted and it fully justifies the trust of customers. In this case, you need to look in the registers and registration documents for the date of registration of the campaign as a legal entity.
Also, pay attention to what this or that insurance company specializes in – some are more involved in motor insurance, and others in life and health insurance of citizens. Be guided by what kind of insurance service you need, including when choosing an insurance campaign, because there is nothing better on the service market than a specialist in his field.
In classical insurance, the concept of “war risk” is quite conditional, as it contains a significant range of risks, and the legislative framework was not ready for the situation that developed in the country. What exactly to include in the insurance contract in terms of “war risk”, each insurance company chooses for itself, including taking into account the specialization in insurance cases.
What do you still need to know about the most relevant products of insurance campaigns?
Regarding car insurance, it should be noted that most insurance campaigns include the specified military risks in the CASCO policy, giving the opportunity to activate them additionally in the CASCO policy, but there are also those that provide the specified type of insurance as a separate service. At the same time, compensation is usually paid for damages caused by missile attacks, drone attacks, collisions with military equipment, destructive shock and sound waves, collisions with military equipment, third-party objects falling on the insured vehicle (regardless of the reasons for their fall and origin), defense and special military equipment destination, damage to the insured car by fire or heat, if the car was placed in the immediate vicinity of the place of fire, etc. As we can see, insurance campaigns try to cover most insurance cases, but what exactly will be included in a specific insurance contract with a specific insurance campaign, you need to read carefully directly when concluding such a contract.
At the same time, insurance campaigns set a number of restrictions on the use of this product. Yes, it is usually noted that the insurance applies to the entire territory of Ukraine, except for the Luhansk, Donetsk, Mykolaiv, Kherson, Zaporizhzhya, Kharkiv regions, the Autonomous Republic of Crimea and the fact that the event will take place at a distance, for example, closer than 150 km to the temporarily occupied territories.
There are, in turn, restrictions based on the age of the insured car and its value. In any case, regarding the specific possibility and conditions of insurance, you need to contact the insurance company that you have chosen, or between which you are choosing. As a rule, they do not want to be responsible and pay the company’s insurance payments in the event of a weapon of general impression.
A similar situation exists with real estate insurance. Although insurance companies offer home insurance against war risks, this offer does not cover the entire territory of the country. Usually, the list of territories covered by this insurance product does not include territories of active hostilities and temporarily occupied territories. Here, it is necessary to largely refer to the order of the Ministry for the Reintegration of the Temporarily Occupied Territories of Ukraine No. 309 of December 22, 2022 “On Approval of the List of Territories in which Hostilities Are Conducted or Temporarily Occupied by the Russian Federation”.
Therefore, the address at which the real estate is located is decisive in this sense. Usually, insurance companies like to carry out such insurance, but in relation to property located on the territory Kyiv (in particular the city of Kyiv), Vinnytsia, Rivne, Odesa, Cherkasy, Volyn, Zhytomyr, Ivano-Frankivsk, Zakarpattia, Poltava, Kirovohrad, Ternopil, Khmelnytskyi, Lviv, and Chernivtsi regions. At the same time, even the distance of the real estate object from the critical infrastructure and military facilities and the insurance of the surrounding facilities will be taken into account. For example, if five residential buildings located next to the CHP are already insured in this way, then the sixth can be refused insurance, but this is decided in a specific case by the insurance campaign in order not to create an excessive burden on its assets. It is impossible to say that it is illegal, because insurance is carried out on the basis of a contract, and the contract is concluded voluntarily by the parties in the event that they have reached an agreement on all its points.
Further, the mandatory conditions for this type of insurance are that the real estate must be put into operation after the completion of repair and construction works (in the case of an apartment, it must be located in a residential building that has been put into operation), the real estate is not must be in an emergency condition, not be pledged by a bank or other financial institution. Each insurance company may provide other requirements for the insurance of my property. At the same time, making concessions to modern realities, insurers allow insuring both their own property and rented property. For leased property, it is necessary to have an officially and properly executed lease agreement, in accordance with the norms of current legislation.
What is interesting about this type of insurance is that the amount of insurance compensation is divided between immovable and movable property in the insured apartment, that is, not only walls are insured, but also decoration and “filling”, although compensation limits may be set here.
The next relevant question arises regarding health insurance. Here, campaigns that specialize in this type of insurance refer to “war risk” insurance in different ways. Usually, insurance against such risks in this direction is unpopular among working companies. Yes, some insurance companies provide this type of insurance, but only to civilians, and those who are not in the zone of active hostilities and at a distance of up to 30 km from it, both corporate clients and individuals. An example of such risks are insurance cases that occurred as a result of missile attacks, mine detonation, etc. This type of insurance is not provided for military personnel and employees of law enforcement agencies. Other campaigns also allow servicemen to be insured, but some set limits on the amount of insurance payment, and the effect of insurance risks depends on whether the serviceman is in a high-risk area at the time of the insured event or not.
Some companies immediately point out that they do not work in a war zone, in temporarily occupied or surrounded territories. And this is understandable, because the risks in this case increase as much as possible. At the same time, if the client finds himself in the specified territory, he can count on the provision of quick emergency care, but the treatment itself, if necessary, cannot be covered by the insurance.
The point that you must pay attention to is the franchise under the contract. Deductible is a part of the loss that is subject to independent compensation (coverage) by the insured at his own expense in the event of an insured event. It is this amount that you will have to pay out of your own pocket in the event of an insured event for which the contract has been concluded. This is normal practice for the insurance market. There are contracts where the deductible is 0 hryvnias, but what conditions the insurance will provide to you depends on many components. Real estate insurance contracts should be monitored especially for this point, because even a couple of percent of the deductible in this type of insurance can result in very “unpleasant” amounts for the wallet.
Now there is also a rarer type of insurance — insurance of crops, machinery and crops against war risks. It applies to farmers, but some insurance companies already provide it.
The specified insurance conditions are more or less unified by the participants of the insurance market, taking into account their own interests and the ability to make insurance payments. In the event that someone offers very “sweet” insurance conditions, while they are sufficiently different from those described above, this is a reason to think very carefully before signing the documents and paying for it.
In turn, the state is trying to systematically approach this issue and regulate it at the legislative level. Thus, on February 5, 2024, the Financial Stability Board approved the concept of creating a war risk insurance system in Ukraine. According to the authors’ plan, the insurance of military risks involves the introduction of both mandatory and voluntary insurance. The concept will still be discussed, refined and implemented in stages. Now the concept provides for mandatory insurance against military risks of a certain list of objects, and this, of course, makes sense.
Due to its novelty, war risk insurance itself has a small number of insurance cases, so there is no significant developed practice in this case. Of course, the insurance company, which takes care of its client, will go to his meeting with all its might in order to resolve the insurance situation. Unfortunately, those regions of the country, in which citizens would most of all seek to conclude insurance contracts in these cases, cannot do so due to the increased degree of risk.
