The waiting period, and what actually decides the amount

A waiting period is not a deductible, and confusing the two is expensive. A deductible takes away money; a waiting period takes away time. It holds that a blockage is not a loss until it has lasted, and policies set that duration at thirty, ninety or one hundred eighty days depending on the cover. It serves two purposes: separating a temporary disruption from a durable one, and leaving the state time to reverse its own decision, which happens more often than people expect. Its consequence is uncomfortable and rarely anticipated: throughout that period the insured is already deprived of its cash without yet being a claimant under the contract.

That leaves the question of what starts the clock, and this is where most files are lost. Intuition says it starts on the day the state shut the window. Many wordings say something quite different: the period runs from a transfer request made by the insured that produced no result. The distinction decides whether a loss exists at all. With no written, dated request there is no starting point, therefore no period, therefore no constituted loss, and that remains true after two years of perfectly real blockage. Some wordings go further and require the insured to renew its efforts throughout the waiting period, to establish that the failure was continuous rather than one-off. An insured who files once and then waits one hundred eighty days may discover at the end that its clock never started running.

Then comes the calculation, and a question brochures never raise: as of what date do you convert? A non-transfer cover bears on funds denominated in local currency, and the indemnity is paid in the policy currency. So a rate is needed, and a rate implies a date. Three dates are plausible and all three appear in real contracts: the transfer request, the expiry of the waiting period, and the settlement. Between those dates, in a country that closed its FX market because it ran out of reserves, there is very often a devaluation. That is where the amount is decided, far more than in the insured percentage: a coverage percentage costs ten points, a badly placed conversion date can cost half the indemnity.

A second line in the same paragraph raises a deeper problem, because it brings two rules into contact. Policies almost always retain the official rate. Yet in a country that has suspended convertibility, the official rate is precisely the price at which nobody can exchange, and it generally overvalues the local currency against the parallel market. The conversion clause therefore commands an amount that the indemnity principle disputes, since that principle holds that an indemnity may never exceed the loss actually suffered. The insured holds a clear contractual text; the insurer holds a principle that governs the whole insurance contract. The debate then stops being a matter of arithmetic and becomes a matter of law, and it rarely settles in the middle.

The insured percentage deserves to be understood for what it is, because it is wrongly read as a disguised deductible. The uninsured share, often ten percent, exists so that the insured keeps a stake of its own in pursuing recovery after being paid. An insured made whole at one hundred percent has no reason left to chase the central bank, to support a proceeding or to negotiate a partial release of the funds, and the insurer inherits a file nobody pushes. That share has a very concrete effect at the recovery stage: amounts recovered are shared pro rata between insurer and insured, which makes the percentage an alignment mechanism rather than a simple withholding.

Finally, one must see what is given up by taking the money. The indemnity does not add to the blocked funds, it is bought against them: the insurer pays in policy currency and receives in exchange an assignment of the claim, or subrogation into the insured's rights over the frozen sums. If the window reopens eighteen months later, it is therefore the insurer that collects the release. Accepting a settlement computed at a devalued rate means handing over, at the same time, every prospect of the rate recovering. The amount and the assignment are not two successive decisions of which one would negotiate the first: it is a single decision, and it is judged on the country's likely trajectory as much as on the figure offered.

One last mechanism works without a sound, and it is always discovered too late. The triggering event occurs during the policy period, but the loss is only constituted at the expiry of the waiting period, therefore several months later. If the policy reaches its expiry date in that interval and no clause expressly provides that a loss remains covered once its triggering event occurred during the period, the cover can lapse in the middle of the very delay it imposes. The contract requires waiting, and the waiting can make it expire. This is the kind of defect one discovers only once, and always at the wrong moment.