You're just restating the insurance company's position. The issue is why don't insurance companies want to cover people against war, and the answer is that that's when the people you relied on take the money and run because there's a decent chance that their erstwhile customers will die (physically or financially) and never be able to come after them.
They will absolutely cover acts of war. It is simple - just ask them to and hand over the extra money.
There is essentially no risk that cannot be insured, but the standard pricing is going to exclude a bunch of tail risks that would be prohibitively expensive to include by default
I think there are probably risks that cannot be insured in practice. One of the particulars of war is that it might destroy many insured parties at once, overwhelming any conceivable insurance syndicate. Yes, you could perhaps sell a few policies with limited coverage, but if you cannot credibly calculate the probability of the event occurring it seems hard to imagine there is a price that will make sense to both parties.
That's no different to any other catastrophe. Earthquake or tsunamis etc.
> it seems hard to imagine there is a price that will make sense to both parties.
The price you'd have to pay is likely to be extremely high due to the value at risk and level of uncertainty, and yes insurance companies would also be modelling their exposure and stop selling at some point. A single tanker, for example, could almost certainly find a price at Lloyds.
As have been pointed out by others, insurance companies are more than happy to cover acts of war in exchange for higher premiums.
Some insurance policies cover acts of god (extremely rare disasters), some don't. They are priced accordingly. I'm sure it is no different with acts of war or anything else.
Insurance companies pretty consistently report ~5% profit margins. Surely if they were simply stealing, their margins would at least be reaching Google levels?
Fair enough. Though I guess I just don't see how the argument that insurance companies are "bad guys" has any legs.
Yes, insurance companies only want to pay out when they are contractually obligated to do so. That is patently obvious. If insurance companies paid out when they weren't, insurance would be much more expensive than it is now.
If an insurance company is unsure a situation is contractually covered, they will not pay, and a court will decide the case. Once such ambitious cases are clarified, all future parties benefit.
I don't see anything shady or underhanded about any of this. Especially since it is all basically part of the definition of what an insurance company is!
