US-Iran crisis: Your travel insurance will not help in conflict zones

Thousands of flights have been cancelled amid US-Iran tensions, but many travel insurance policies may not cover losses linked to war-risk events

Travellers whose plans have been thrown into disarray by the conflict in the Middle East may have to fend for themselves, as insurers invoke the war clauses in their travel policies. The escalating US–Iran conflict is likely triggering one of the largest waves of international travel disruption this financial year, with more than 3,000 global flights cancelled and thousands of passengers facing uncertainty over travel insurance claims, as most standard policies exclude losses linked to war-risk events.

 

“We are experiencing a rise in customer inquiries for assistance, especially around itinerary changes, delays and connection gaps. The high claims volume is greater in relation to operational issues than with medical issues as many travellers are claiming reimbursement for expenses incurred as a result of additional lodging, meals and rebooking fees,” said Arun Ramamurthy, Co-founder, Staywell.Health.

 

 

Meet Kapadia, Head of Travel Insurance, Policybazaar, said, “We are receiving requests for extension in travel insurance period as travellers are stuck due to airspace closures but no significant rise in insurance claims from Middle East.”

 

What is travel insurance helpful in such cases?

 

“The situation in West Asia is due to an act of war and travel insurance doesn’t cover the impact on travel or health due to act of war in the region. However, some companies have offered to cover the health aspects of the travellers arising out of general health circumstances, not arising out of war,” Kapadia told Business Standard.

 

For instance, if an Indian expat living in the Middle East dies of a heart attack, and there is no link to the ongoing conflict, the claim can still be honoured, provided there are no geographical exclusions in the policy.

 

The war exclusion clause

 

Most policies carry a war exclusion clause that disallows claims related to:

 

• War, whether declared or undeclared

• Invasion or act of foreign enemy

• Hostilities, civil war or rebellion

• Insurrection or any similar events

 

This means that even if the policy is active and all premiums are paid, a death resulting from these causes may not be covered.

 

Ramamurthy said in general situations insurance can help travellers in cases of:

 

• Trip delay and interruption coverage for any additional lodging, meal and local transport costs

• Missed connection benefits and rebooking coverage subject to policy terms

• 24/7 assistance services for travellers who need additional travel arrangements made or on-ground coordination

• Emergency medical or evacuation coverage, if applicable, while travelling abroad

 

“It is important to understand that while there are typically exclusions for loss arising out of war and conflict from most insurance policies, the airline’s operational decision is usually considered a sufficient cause to obtain the necessary travel insurance coverage to assist them with disruptions that may have occurred to their travel itinerary,” he said.

 

What policyholders should check

 

Sandeep Katiyar, Co-founder and CFO of Finhaat, listed a few things individuals should watch for in their policy documents:

 

• Read all exclusions carefully, especially those mentioning war, terrorism, or high-risk jobs

• Check for optional add-ons such as accidental death or terrorism cover

• Review territorial limits — some policies exclude coverage outside India

• For NRIs, confirm whether being in a high-risk area affects claim eligibility

 

“If you see terms like ‘acts of war’, ‘civil commotion’ or ‘terrorism’ in the exclusion section, it is a red flag,” he said. “Clarify with your insurer.”

 

He added that policyholders living or working in high-risk zones should consider:

 

• Comprehensive international life insurance that includes conflict zones

• AD&D (Accidental Death and Dismemberment) riders with terrorism cover

• Group insurance negotiated by employers with explicit war-risk inclusions

• Global insurers who state inclusion of conflict zones, subject to certain conditions

 

Flight cancellations, travel uncertainty

 

In India, where Gulf routes account for a large share of international traffic, the impact has been considerable.

 

Airports in Delhi and Mumbai have reported more than 150 combined international flight cancellations during peak hours. Indian carriers such as IndiGo and Air India have issued passenger advisories offering rebooking and refund flexibility, but these do not extend to reimbursing external travel expenses such as hotel stays, tours or onward transport.

 

Airlines are also likely facing rising operational costs due to longer rerouting distances.

 

Flights that previously passed directly through Gulf air corridors are now flying around restricted zones, adding two to three additional flight hours to a journey and increasing fuel burn. Industry estimates suggest Indian airlines alone could face hundreds of crores in short-term revenue losses if the conflict continues.