subject: Strange Insurance Clauses [print this page] There's a lot of insurance types out there, provided by thousands of companies. Some of the most well known include life insurance, health insurance, property insurance, and so on. But there's a lot of strange, weird insurance types and clauses as well, for situations you may not think about. Some are simply weird and not worth getting, but there's some clauses that can be very useful in certain, very specific cases. Here's a couple of the strange ones.
One clause that can be added to some home insurance policies is against nuclear disasters. Certainly, most people don't need an insurance against nuclear disasters, because there's just no sign that this will ever affect their houses. Of course a nuclear war may happen someday, in which case everyone will be at risk, but even if that happens, chances are insurance companies would not pay, since they all have fine print that says they don't pay in cases of war. Instead, this clause can be useful if you live near a nuclear power station. Again, it's a somewhat dicey case. If the nuclear reactor goes, and your house is irradiated, will such a clause really cover you? It's hard to know, since these cases are so rare.
Another interesting type is a terrorism insurance. This is something that was almost unheard of before, but in the past decade, as terrorism became a front page news item, it's a type of insurance that has gained traction. Typically, an individual home owner wouldn't take that type of policy, but a corporation, one that owns equipment or infrastructure that may be targeted by terrorists, may be tempted by such a clause. For insurance companies, it's something that's very difficult to plan for. Terrorist attacks are rare, but can be devastating. September 11, 2001 attacks resulted in an estimated $31.7 billion loss. Overall, only specialized companies typically offer this type of protection.
A last type of interesting insurance is a kidnap and ransom insurance. Again, this is not something a typical individual will need. The chance that you will be kidnapped, and someone will ask for a large ransom, is tiny. But some people have a much higher risk. For example, someone who is wealthy and lives in a country where security may not be as strict as in the developed world, may fear that kidnapping is a real threat. For these cases, the kidnap insurance can be something that would help. Typically, these policies indemnify the insured from having to pay a ransom. The company doesn't pay the actual ransom, but they reimburse if the insured person had to pay. A study shows that criminal gangs make up to $500 million a year from ransom payments alone.
There's many more types of weird, strange, and unusual insurance clauses, but those are some of the most interesting ones. Overall, the chance that you need one of these clauses is remote, but it could happen, which is why it's important that you be aware of them.
by: Casey Trillbar
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