Does Travel Insurance Cover Terrorism?

Terrorism: it’s a scary word, and one we’d rather not think about when planning our next trip abroad.

Unfortunately, events like 9/11, the Bali bombings and the attacks in Paris in 2015, have altered the way we travel forever. Tighter travel regulations have become the norm and heightened security risks are commonplace.

With non-stop news alerts at our fingertips in real-time, it’s easy to think that a terrorist attack is always likely to happen and likely to impact you.

Whilst these events can happen, they are very infrequent and it is important to gain some perspective by separating the likelihood of an act of terrorism occurring from the likelihood of you being directly involved. There is usually no travel insurance cover for cancellations due to the fear or threat of a terrorist incident at your destination, so it pays to exercise caution before dropping out of your trip and to understand the cancellation terms of your booking agency if you're hesitant to travel.

It is smart to understand your travel insurance coverage for terrorism and to protect your travel plans against the impact of a terrorist attack if you're heading to a destination where terrorism is of real concern. It is common sense to avoid travel to areas where there has been a persistent record of terrorist attacks or kidnappings. Remember, most insurers will not cover you to travel to destinations where the government has issued a 'Do Not Travel' warning.

It is important to understand that every travel insurer will handle a terrorist incident differently and will have varying cover exclusions. Although most insurers will generally consider terrorism or acts of war to be an exclusion a few will offer limited cover.

Travel Insurance And Travel Warnings

As soon as a terrorist attack occurs the government will issue travel warnings for that region or country. Restrictions will now apply to the effected destinations and you would generally no longer be covered to travel to those regions (particularly those with a level 4 or 5 government warning). Should you choose to travel to a country against government warnings your travel insurance cover benefits may be rendered void.

Cancellations Or Delays Due To A Terror Attack

In the event of a terrorist attack or political unrest, most, if not all, travel insurance policies exclude cover for cancellation fees & lost deposits, disruption of journey or alternative transport expenses. Though it’s a difficult pill to swallow, insurers ruled out these specific benefits after the risk of terrorism was deemed too great. However, plenty of travel insurers will still provide cover for medical expenses in the event of a terror attack.

Which Insurers Cover Terrorism?

General Advice Warning: The contents of this article were accurate at the time of writing. Insurers change their policies from time to time, so some information may have changed. You should always read the Product Disclosure Statement of your chosen insurer to understand what is covered and what isn't. The information provided is of a general nature only and does not take into account any personal objectives, financial situation or needs. Before making a decision you should consider the appropriateness of the information having regard to your personal circumstances.

What Are My Options?

In the event of a large scale terror attack like those which occured in Paris in November 2015, plenty of travel and transport companies respond to customers concerns with humanity, allowing travellers to postpone their bookings.

However, in the current climate with a more global threat of terror attacks it can be good practice to have a backup plan should you need to cancel or delay your trip due to terrorism.

It may also be worthwhile looking for accommodation deals that allow for free cancellation (often possible on sites like Booking.com and Expedia). Be sure to check the fine print to ensure you're not caught out by any additional fees or upfront pre-payments.

Flexible fares may be more expensive but could pay off when weighed up against the potential emotional and financial cost of a trip cancellation. It may also be worth looking into package holidays, which, although these won't necessarily have flexible cancellation policies, the operator will be under a legal obligation to ensure your safety in a crisis.

Medical Expenses Due To A Terror Attack

A few insurers do provide cover for medical and hospital expenses caused by an act of terrorism, including the cost of bringing you back home. It's crucial to review your policy coverage, as every travel insurer will vary in its terrorism related benefits.

In any case, medical cover is essential for travellers heading abroad. The risk of being exposed to illness or injury is simply not worth taking once you consider the full cost of medical and hospital expenses overseas. Add to that the expense of medical evacuation, accidental death or total permanent disability and the need for travel insurance should not be under-estimated.

Whilst you may not be able to rely on travel insurance for all terrorism-related claims, it is still vital to take out a policy before you head away. The Australian Department of Foreign Affairs (DFAT) website, Smartraveller can be a very useful resource and one worth checking regularly to stay abreast of any current events and threats. The Australian government can help travellers abroad during and after a terrorist incident, so be sure to register your travels with DFAT as well.

Although travelling in times of uncertainty can be nerve-wracking, it can be helpful to take some perspective. Statistically speaking, the chances of being impacted by an act of terrorism abroad are minimal. However, when it comes to particularly dangerous destinations, it is worth considering your need to travel. Always take travel insurance along with you and keep an eye on current events. For more information on safe travel check out our guide to travel warnings.