Are you covered for acts of terror? Most people don’t know

When he left for work that morning, he didn’t expect his entire life to change by evening. Standing outside what remained of his office building after a blast, he called his insurer — shaken, confused, hopeful.

“What do you mean it’s not covered?” The representative’s tone was calm but final. His property insurance didn’t include terrorism damage. He had skipped the optional add-on to save ₹3,000 a year. Now, he was staring at potential losses of over ₹25 lakh. His story raises a question most Indians never ask until it’s too late:

Are you financially protected if a terror incident affects your life, home, business, or vehicle?

In most cases, the answer is no and most people don’t even realise it.

The Coverage Gap Nobody Talks About

After the recent Red Fort blast in Delhi, conversations around safety surged. But one angle remained largely unspoken: insurance preparedness. Many Indians assume that “comprehensive” means “everything is covered.” But terrorism damage is almost always an optional add-on, not a default feature.

This creates a silent but serious vulnerability. The risk may be low, but the financial impact if it happens can be devastating.

Does Life Insurance Cover Terrorism? Mostly Yes but With Nuances

Most major term insurance plans in India LIC, ICICI Prudential, Max Life, HDFC Life do pay out for deaths caused by terrorism, unless specifically excluded. Term plans generally cover all causes of death except suicide in the first policy year. But riders like accidental death or critical illness may not apply in terrorism cases.

There are also clear exclusions:

● Deaths in war zones

● Deaths due to active participation in riots or insurgencies

Homes, Vehicles & Businesses: Terrorism Cover Is NOT Automatic

This is where the real confusion lies.

Home & Property Insurance

Most home or property insurance plans exclude terrorism by default. You must actively add terrorism cover at purchase or renewal.

Motor Insurance

Comprehensive motor insurance generally covers damage from fires or explosions caused by a terror act only if the terrorism add-on is taken. A regular “comprehensive” policy does not automatically include it.

Business Insurance

For businesses, terrorism insurance covers:

● Physical damage (building, machinery, stock)

● Loss due to explosions or arson

● Business interruption after an incident

Without it, even a minor blast nearby can trigger losses that destroy cash flows for months.

Health Insurance: A Quiet but Important Shift

More than 85% of new retail health policies now automatically include terrorism cover. However, many older policies or corporate group plans still exclude it. A quick policy review can help ensure your family’s medical expenses would be covered if they ever needed treatment after such an incident.

How to Check If You’re Covered: A Simple Action Plan

1. Review your policy documents today

Look under headings like “Exclusions,” “Extensions,” or “Add-ons.”

2. Add terrorism cover at renewal

It cannot be added mid-term, so renewal becomes crucial.

3. Assess your risk

Metro areas, commercial properties, and high-footfall businesses face higher exposure.

4. Look at the cost-benefit realistically

The yearly cost is usually modest hundreds or a few thousand rupees compared to potential losses of lakhs or crores.

5. Remember the 15-day waiting window

If added mid-policy (only during issuance of a fresh policy), claims for incidents within the first 15 days aren’t payable.

The Bottom Line

Terrorism coverage isn’t about fear. It’s about prudence. It’s about ensuring that one rare incident doesn’t derail your plans, your savings, or your family’s stability.

Review your policies. Ask questions. Add the right protection.

Because when the unthinkable happens, the right coverage can be the difference between rebuilding… and starting from zero.

(Views are personal; the author is CEO at BajajCapital Insurance Broking Ltd)