A leading UAE insurance company has introduced vehicle war cover in an effort to offer greater protection to customers in response to the Iran conflict.
Sukoon Insurance said it was providing an add-on for comprehensive policyholders to address a “critical gap” in the sector highlighted by the onset of the war in Iran.
The company said the feature provides coverage matching a vehicle’s insured value, up to Dh5 million ($1.36 million), covering direct physical damage in extreme circumstances.
The UAE has defended itself against 551 ballistic missiles, 29 cruise missiles and 2,265 drones, all launched by Iran since February 28.
While the country's air defence systems intercepted the vast majority of projectiles, the attacks still caused damage to some buildings and cars.
Attacks on the Emirates stopped for several weeks after a ceasefire agreed between the US and Iran, but the country has faced renewed strikes this month.
“In today's uncertain climate, standard motor policies leave a critical gap by excluding damages caused by war and regional hostilities,” Sukoon said on its website, describing the new product as a way to eliminate the uncertainty left by traditional insurance.
Adapting to evolving challenges
Julien Audreire, executive vice president and head of consumer line and marketing at Sukoon, told The National that motor war cover protects vehicles within the UAE from physical loss or damage caused by events that standard policies do not cover, such as war, acts of terrorism or civil unrest.
“It is about ensuring we are here for our customers when things feel unpredictable,” Mr Audreire said. “It’s an optional add-on for exclusively to our comprehensive motor policyholders.”
He said there had been high demand for the new insurance policy among customers.
“We have seen a consistent increase in uptake. The pricing is highly bespoke, calculated on a pro-rata basis. We assess each premium according to the vehicle’s specific insured value and the remaining duration of the client’s current policy,” he added.
“As awareness grows among our clients and distribution partners, it is clear that there is a heightened appetite for this level of security.”
He said this trend reflects a broader shift in customer sentiment, with a proactive desire to protect assets against extraordinary events.
“War, terrorism and warlike operations remain standard exclusions under conventional motor insurance policies,” said Mr Audreire. “In light of ongoing regional situation and heightened public concern surrounding such exposures, we introduced the motor war cover to bridge this critical protection gap for our motor clients.
“Our goal is to offer clients peace of mind, ensuring that their vehicles remain protected even during periods of uncertainty.”
Expanding support
Industry experts said the move represents a gradual expansion in offering such protection from big business to the public.
“We’ve seen insurers increasingly introduce solutions aimed at protecting assets against damage arising from war or political violence,” Hitesh Khanchandani, co-founder of NewTech Insurance Brokers LLC, told The National.
“Initially, these covers were more common for corporates and large institutions, but we’re now seeing a gradual extension of similar protections to individuals as well.”
Mr Khanchandani noted that while several insurers have explored similar products for businesses, only a limited number of insurers have launched offerings specifically tailored for individual motor insurance customers.
“War coverage generally applies to damage or loss resulting directly or indirectly from war-related events, including invasion, civil unrest or politically motivated violence, though exact terms vary by insurer and policy wording,” he said.
Pricing for such policies is still emerging across the market, with entry-level costs starting at around Dh90 as an add-on to existing motor plans, according to Mr Khanchandani.
“Insurance is fundamentally about peace of mind,” he said. “Having this additional layer of protection offers reassurance against low-frequency but high-impact risks.”
However, he said, demand for the cover remains relatively limited so far.
“At the moment, the uptake for this type of risk cover remains relatively low, largely because there is no mandate around it yet,” Khanchandani said. “A large part of this is due to pricing, as the commercials remain relatively high at this stage.”
Proactive response
Vidya Veerapandian, co-founder of FS Brew Insurtech and Insurance Podcast, a programme dedicated to covering the region's insurance industry, told The National that Sukoon’s offering was notable because mainstream insurers have traditionally excluded war-related risks from retail motor policies.
“This cover is a proactive, retail-level response to shifting political risks,” she said. “Since this is being provided by a mainstream insurer as an add-on, it is noteworthy rather than routine.”
Ms Veerapandian said other insurers are understood to be working on similar products, but high reinsurance costs remain an obstacle.
“Most customers discovered their policies excluded war damage only during the conflict, a gap Sukoon moved quickly to fill, making the launch both commercially logical and reputationally smart,” she said.
Still, analysts said long-term demand may depend on how regional tensions evolve.
“Fear-driven purchasing has a short shelf life,” Ms Veerapandian said. “If the perceived risk diminishes faster than anticipated, uptake for a product like this could fall well short of projections. They sell in moments of anxiety and stall in moments of calm.”
