In Superhero and Monster Movies what does property insurance look like?

As we start to see the possible end of quarantine and Covid-19 restrictions in Hong Kong, we can think back over the last year and appreciate the slow return to normality that 2021 promises. If you were anything like this Author, 2020 was spent social distancing, practicing independent activities, and (for the most part) staying at home.

It wouldn’t be an understatement to say that many people consumed far more media, and watched many more movies in 2020 than they would have normally done. If you, like this author, were watching any Marvel Cinematic Universe films or Monster Movies over the last year and wondered exactly how the pieces are picked up after the wanton property damage and destruction caused by the Avengers, then this is the article for you.

In the lighter side of insurance, we will be examining destructive fictional universes and looking at how insurance could possibly apply.

Disclosure: CCW Global Ltd has no affiliation with The Walt Disney Company, its subsidiaries, or its properties. CCW Global Ltd furthermore has no affiliation with Sony Pictures Entertainment, Legendary Pictures, or Marvel Worldwide Inc.

What is Insurance

Insurance is defined as the equitable exchange of risk from one party to another for a predetermined fee.

This assumes that there will be equity in the policy; the underwriter covers their risk of a claim with an appropriate premium, and the policyholder ensures that they are adequately protected against the risk in question.

However, one of the core concepts to insurance is the idea of a “Fundamental Risk.” That is to say, a risk so intrinsic, so hazardous, that there is absolutely no uncertainty that a loss will occur. Where a Fundamental Risk exists, no insurance is able to be purchased. This is simply due to the fact that there is no “equitable exchange” of risk – a fundamental risk is guaranteed to occur, and will result in a loss.

Consequently, fundamental risks would normally be excluded from a policy.

But what is a fundamental risk?

Fundamental Risks and Insurance

If we take the above definition of a fundamental risk, then a good example of something that would be considered commercially uninsurable would be a home that was built on top of an active volcano. From the underwriter’s perspective a claim is definitely going to happen, so any attempt to insure that volcano property is going to be unsuccessful.

Similarly, an individual who has been in numerous at-fault car accidents and who has had their driving license revoked, is a fundamental risk from the perspective of the Car insurance underwriter. This individual would be guaranteed to experience a loss, based on past behavior, and would be excluded from coverage on that basis.

Fundamental Risks are critical to the overall concept and operation of insurance. The mechanisms of insurance must be equitable in order for the strict definition of the product to be met. Without equity, on both sides of the insurance equation, there cannot be a contract of insurance.

While this is extremely well and understood in the real world, what would the situation be if you happened to live next to Dr. Strange? Even better, what is the story when Godzilla and King Kong come to visit Hong Kong this summer and start knocking down buildings (just what we needed after COVID-19, some light distractions!).

In these fictional universes, surely there must be some form of insurance protection?

Super heroes and Property Insurance

When individual Avengers first started appearing, they generally contained their damage. Tony Stark really only blew up his own factory in Iron Man and Thor limited his destruction to a remote corner of New Mexico in Thor. But by the time The Avengers rolls around, there is a full-blown intergalactic invasion of New York – and the destruction gets bad.

More movies mean progressively worse, and wider-spread damage (by Age of Ultron the Avengers are blowing up Europe, Black Panther ruins private property in Korea, and both Infinity War and Endgame see global destruction). Even individual characters ramp it up over the course of their own films; Thor and Natalie Portman destroy Greenwich in The Dark World.

Insurance is based on understanding risks and approaching them in a consistent and logical manner. By managing your risks, you are able to limit your exposure to loss.

By the time Tony Stark has a showdown with a technological baddy in the middle of the Monaco Grand Prix there may have been some radical shifts going on in the way that this universe approached risk.

Or would there?

Is Superhero Damage Excluded from your policy?

If you have ever looked at your property and all risks insurance policy you will have noticed that there is no exclusion for damage caused by superheroes in the plan.

However, insurance is an old product – the concept of insurance has been around for centuries, and pretty much any risk that could possibly be covered has been covered. So it may not come as a surprise that while it is possible to get Fire and Allied Perils Insurance protection (commonly known as Property All Risks Cover), there are exclusions commonly found on these plans that may apply to Superhero property damage.

More specifically, most Property All Risks insurance plans will exclude loss or damage which has been caused by any type of War or related peril. Related perils would include things like invasion, civil commotion, military resolution, civil war, and so on.

Any action by the Avengers, or a member of the Avenger team would definitely be considered, at minimum, a civil commotion. With the literal invasion or New York by aliens in Avengers the exclusion is very amply satisfied, any of the damage caused by either aliens or the Avengers during the defense of New York would almost certainly be excluded from coverage by any existing property insurance policy – even if the fundamental risk of the avengers was not yet truly realized, and no specific exclusion applied to their existence.

There is, however, a specific exclusion which would apply solely to the Hulk – most Property All Risks insurance plans will normally exclude any type of loss or damage which is caused by nuclear contamination, radiation, or related perils. As the Hulk is the product of gamma radiation exposure, his existence is solely caused by nuclear contamination, so any property insurance company covering damage caused by the Hulk would have extremely reasonable cause to deny the claim, unless the policyholder had included specific coverage for such damage.

Insuring New and Unexpected Risks

It is possible to assume that there would be a class of insurance products created in the Avengers universe (or other universes where similar risks exist, like Godzilla) designed solely to assist with such risks – the avengers are not going to be damaging all cities everywhere, all the time.

Just as we saw with the Covid-19 situation and contingency insurance products, where event organizers could have added communicable diseases as a cancellation risk prior to the commencement of the policy and the pandemic, individuals and businesses properly managing their risks in the Avengers universe should have been speaking to their insurance broker or advisor about carving back certain exclusion in the policy.

Even with current, real world property insurance products, it is possible to remove exclusions or expand the scope of cover for an additional premium. Whether this is something that would cover a catastrophe on the scope of an Avengers attack is uncertain, especially with the standard exclusions in place with current policies, and the fact that it is possible the Avengers would be considered a fundamental risk; particularly if you live in New York.

Let CCW Global Simplify Your Insurance

Even though we’ve been talking about fictional characters and hypothetical insurance situations in this article, CCW Global has vast experience in helping our customers here in the real world. No matter what life throws at you, our expert team of brokers has the knowledge and capability to provide you with the coverage options you deserve.

For more information or for a free quote, please Contact Us today.