In the case of the business executives who were flying with Ron Brown when his plane crashed (or was shot down), the insurance companies were on solid ground to refuse the claims because the U.S. State Department had made an official declaration warning people about traveling in the Balkans. My understanding is that many large life insurance claims were NOT paid in that case.
I'm not so sure about that. The total casualty claims could exceed the $20 Billion of hurricane Andrew, and that almost broke several large companies. These companies may have to refuse to pay in order to stay in business.
Both my home owners policy and life insurance policies state they do not pay for acts of terrorism or war. If the insurance companies don't pay, I'm sure Uncle Sam will just inflate the currency and pay all the bills.