Seesam Insurance customers recently received an unpleasant surprise when their home insurance premiums increased overnight.

For example, a customer insuring a 200-square-meter property received an offer requiring them to pay €245 a year instead of the previous €190 – an increase of nearly 30 percent.

The reason was a new charge for coverage against war-related risks.

Indrek Petter, head of the insurance department at Seesam Insurance, said coverage against war-related risks primarily protects people's homes against explosions caused by stray military drones, missiles, shells and mines.

He explained that the monthly premium is around €1 for smaller apartments and around €3 for an average detached house. "It depends on the size of the house," Petter noted.

Customers must opt out themselves

The change was introduced by default, without asking for consent. Customers must now notify the company themselves if they wish to opt out.

"We add it to the insurance offer. Generally, the customer reviews it and consults their account manager or salesperson," Petter said. He added that this should then lead to a discussion about whether the customer wishes to opt out of coverage against war-related risks.

The company began offering war insurance following events in the spring, when Ukrainian drones started appearing in Estonian airspace after being knocked off course.

But several other insurance companies are moving in the same direction.

Swedbank and Elama Insurance also offer compensation for war-related damage, but their customers do not have to pay an additional fee. The new terms will take effect this week.

Hardi Saarniit, head of home insurance products at insurance company If, said that average insurance premiums may eventually change, but the company does not charge extra for compensation for war-related damage.

Coverage does not apply during a state of war

He explained that their coverage is intended for the current situation, in which Russia and Ukraine are at war and drones also stray into Estonian airspace.

"If the situation were to change, for example, if a state of war were declared in Estonia, then this coverage would no longer apply," Saarniit noted.

The Estonian Insurance Association hopes prices will not rise with the new terms.

Lauri Potsepp, a board member of the Estonian Insurance Association, said that insurance is moving toward packages tailored as precisely as possible to customers' interests and needs.

"In other words, individual customers are offered coverage for the risks they are interested in, and this makes it possible to keep insurance prices under control so that insurers remain competitive," he said.

Insurance providers are not the only sector using war risks to push up prices. Last week, ERR reported that utility providers are also raising prices due to increased security risks.

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