The Word 'War' Is Now Worth Billions

Trump has been careful with his language. In remarks and formal notifications to Congress, he has used the word "hostilities" — NOT "war." For the insurance industry, it doesn't matter.

According to Associated Alliance's analysis published March 12, 2026, most standard insurance policies include language covering "war, invasion, acts of foreign enemies or hostilities whether war be declared or not." No formal declaration required. Missile strikes, drone attacks, military operations by state forces — all of it gets classified as warlike operations under standard policy language. Claims denied.

22 Ships. Billions Exposed. Most Companies Under-Covered.

Since the U.S.-Israel strikes on Iran began February 28, 2026, 22 ships have been attacked in the Strait of Hormuz through mid-April, according to Al Jazeera citing ship tracking data from Kpler.

The problem: according to global insurance broker Marsh, the majority of companies operating in the Middle East bought only terrorism and sabotage coverage. They stopped short of purchasing full war risk insurance.

David Kinzel, Aon's U.S. Practice Leader for Political Risk, told CNBC: "Many companies that have operated in the Middle East for a long time have become accustomed to the relative stability in the region and may have under-appreciated how quickly geopolitical risk can escalate."

Companies that had operated without incident in the region for years bought minimal coverage and are now discovering the gaps.

Aviation Is Bleeding Too

This isn't just a shipping problem. Law firm Browne Jacobson reported on March 26 that missile strikes have already hit airports in Dubai, Abu Dhabi, Bahrain, and Kuwait. Entire airline fleets are sitting grounded across the Gulf.

Aviation war insurers are now issuing review notices — pulling or repricing coverage across affected countries. A 2025 legal ruling, AerCap Ireland Limited v. AIG, established that aircraft can be considered "in the grip of a war peril" before any physical damage occurs. War insurers could be on the hook the moment a plane sits idle in a conflict zone, even if it never gets touched.

Grounded jets burn money just sitting there — crew costs, airport fees, rerouting logistics. Those costs are NOT covered under standard aviation policies, according to Browne Jacobson.

Travelers Are Stranded and Largely on Their Own

Thousands of flights have been cancelled. Airlines have diverted from Dubai, Doha, and other major Gulf hubs. Standard travel insurance? Browne Jacobson is blunt: most policies exclude war disruptions entirely. Passengers eating extra hotel nights, rebooking fees, and extended stays abroad are getting NO reimbursement from their insurers.

Some specialty war zone travel policies exist. Almost nobody buys them for a business trip to Dubai.

Trump's DFC Insurance Scheme: The Government Selling Coverage for a War It Started

After private insurers pulled out and oil prices surged more than 15% following the February 28 strikes — per Al Jazeera — Trump announced via social media that the U.S. Development Finance Corporation would offer political risk insurance to shipping companies willing to transit the Persian Gulf.

The DFC, as Times Now News reported on March 5, was originally designed to mobilize private capital in developing nations. It is NOT a war risk insurer. It is NOT a maritime underwriter. Trump repurposed it on the fly to fill the vacuum his own military action created.

The DFC confirmed it would support "commercial shipping charters, shipowners and key maritime insurance providers" to minimize market disruptions. Excess premiums collected flow to the U.S. Treasury.

The U.S. government launches strikes. Private insurers exit. The government then sells insurance on the resulting risk. And pockets the premiums.

Critical questions remain unanswered as of publication: What premiums will the DFC actually charge? How many shippers will buy in? What happens when a claim hits — does Congress authorize the payout? Times Now News raised all of these and got zero answers from the administration.

What Mainstream Coverage Is Getting Wrong

Most outlets are framing this as a "markets story" — oil prices, stock movements, ceasefire rumors. That framing misses the structural damage happening underneath.

The real story is a slow-motion claims crisis. Businesses across the Middle East — shipping companies, manufacturers, airlines, retailers — are discovering right now that the coverage they paid for doesn't cover what's actually happening. Insurers are invoking war exclusions. Reinsurers are pulling back. Premiums on war risk policies have, according to Associated Alliance, "surged dramatically" — making new coverage expensive for anyone who didn't already have it.

The DFC scheme gets attention because it's a Trump headline. The unglamorous truth is that most of the economic damage is already locked in, and no government press release changes that.

What This Means for Regular People

Higher shipping costs get passed to consumers. Goods that move through the Persian Gulf — electronics, clothing, fuel — get more expensive. Airlines that reroute burn more fuel and raise ticket prices. Small businesses with uninsured losses in the region face potential bankruptcy.

And the U.S. government — which launched the strikes that triggered all of this — is now in the business of selling insurance against the consequences.