Does travel insurance cover terrorism?

Quick summary for busy readers:

• Most travel insurance policies exclude cancellation costs and lost deposits caused by terrorism, but plenty still cover medical expenses if you’re caught up in an attack.
• Terrorism is generally defined as an act intended to advance a political, ideological or religious cause, and to coerce or intimidate a government or the public. Insurers can have slightly different wordings, so it’s worth checking your policy’s definitions section.
• If you travel to a destination the Australian Government has issued a Level 4 “Do Not Travel” warning for, your cover is likely void regardless of what caused the warning.
• Simply being afraid of a potential attack isn’t a valid reason to cancel and claim. Most insurers only recognise cancellation as covered if specific criteria are met, like an actual incident occurring near your destination.

 

Terrorism isn’t something anyone wants to think about while planning a trip, but events like 9/11, the Bali bombings and the 2015 Paris attacks have permanently changed how the travel industry, and travel insurance, treats the risk. With news alerts landing on your phone in real time, it’s easy to feel like an attack could happen anywhere, at any time. In reality, these events remain rare, and it’s worth separating the general possibility of terrorism occurring somewhere in the world from the actual likelihood of it affecting your specific trip.

But to try and put your mind at ease, we’ve outlined exactly what travel insurance does and doesn’t cover when it comes to terrorism, what actually counts as a terrorist act under most policies, and where to find insurers who offer cover for it below.

Does travel insurance cover terrorism?

It depends heavily on the insurer and exactly what kind of cover you’ve got. Most travel insurance policies treat terrorism as at least a partial exclusion, but the details vary a lot from one provider to the next.

Cancellation is where most policies draw a hard line. If a terrorist attack or a period of political unrest occurs, the majority of travel insurers exclude cover for cancellation fees, lost deposits, trip disruption and alternative transport costs connected to it. This is because the financial risk of covering cancellations across an entire region during a crisis is simply too large to price sensibly.

However, medical cover is different. Plenty of insurers will still cover medical and hospital expenses, and sometimes medical evacuation, if you’re injured in a terrorist attack. As always, it’s worth checking your specific policy’s terms.

Worth knowing too: As soon as an attack happens, the Australian Government will typically update its travel advice for that region, and once a destination reaches a Level 4 “Do Not Travel” warning, most insurers will no longer cover you there. If you choose to travel against that advice anyway, your policy’s benefits can be voided entirely, regardless of what specifically goes wrong.

What qualifies as terrorism?

Most insurers use a fairly standard definition: an act or threat intended to advance a political, ideological or religious cause, and to coerce or intimidate a government, or the public, into a particular course of action.

That said, definitions do vary between insurers, and some build in their own specific wording. A typical policy definition might describe terrorism as an act or threat of terrorism, or as a terrorist act, or the use of military force or other action by a government or official authority to intercept, prevent or reduce the impact of a terrorist act. It’s worth checking the definitions or “words with special meanings” section of your policy wording before you buy, since this is exactly the kind of detail that determines whether a specific event will fall inside or outside your cover.

Is terrorism coverage worth it?

Yes. Statistically, the chances of being personally affected by a terrorist attack while travelling remain low; but medical cover in general, for any reason (think illness, injury or an actual terrorism-related incident), is one of the most valuable parts of a travel insurance policy, since overseas medical bills, evacuation costs and hospital fees can be astronomical without it.

If you’re genuinely worried about being affected by a terrorist attack, you should have a backup plan for disruption specifically, since cancellation cover for terrorism is so commonly excluded. Look for accommodation with free cancellation policies (commonly available through sites like Booking.com or Expedia), consider more flexible airfares, or book through a package holiday operator with a legal duty of care to you in a crisis – doing all of these things can help fill the gap that travel insurance often won’t.

You should also check Smartraveller regularly before and during your trip; not just for terrorism risk specifically, but for staying across anything that might affect your destination.

Where can I buy terrorism travel insurance?

These Australian insurers offer some form of terrorism-related cover: