Estonian insurers begin offering cover for war-related risks
A growing number of insurers in Estonia now offer clients compensation for damage linked to war and hostilities. The Estonian Insurance Association hopes any price increases will be small.
More and more companies on Estonia's insurance market are offering policies that also cover war-related damage. War and combat operations were traditionally treated as force majeure, which freed insurers from any duty to pay for resulting losses. Now insurers are responding to customer concern, heightened by an incident this spring in which a drone struck the chimney of the Auvere power plant.
Seesam offers a separate add-on
The insurer Seesam began offering what it calls war risk protection this summer, at customers' request. It shields homes against the consequences of stray drones, missiles, shells and mines exploding. Indrek Peter, head of insurance at Seesam, told the programme Aktuaalne kaamera that the cost is small: about 1 euro a month for a small apartment and 3 euros a month extra for an average-sized home.
According to him, most other market players do not list this cover as a separately paid service but include it in their policies.
Effect on prices
Hardi Saarniit, director of home insurance at the insurer If, said the cover is designed for current conditions, in which Russia and Ukraine are at war and individual drones accidentally enter Estonian airspace, damaging property owned by residents. Lauri Potisepp, a board member of the Estonian Insurance Association, said clients are offered protection against the risks that matter to them, which helps keep prices under control and offers competitive. The association hopes that any rise in prices will be modest.
When the cover stops applying
The cover is based on stray drones entering the country in peacetime. If circumstances change, for example if martial law is declared in Estonia, the protection ceases to apply, Saarniit said. Seesam, for its part, defines a real war as one involving at least two nuclear powers. Peter explained that if five nuclear states began fighting each other, the policy would not apply, but at present only Russia among nuclear powers is involved, so the insurance remains in force.
