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 most recently, the attacks in Paris, have altered the way we travel forever.Tighter travel regulations have become the norm and heightened security risks are commonplace.
In the past 12 months alone terrorist attacks have taken place in Paris, Tunisia, Bangkok, Indonesia and most recently, Turkey. Whilst these events should not stop travellers from heading abroad, it's simply smart practice to protect your travel plans against the impact of an attack. That being said, plenty of confusion surrounds travel insurance as it relates to terrorism. More specifically, will travel insurance cover an act of terrorism?
To begin with it’s 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...keep reading for more.
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 those destinations and you would generally not 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 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 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 were deemed too great. However, plenty of insurers will still provide cover for medical cover in the event of a terror attack.
What are my options?
In the event of a large scale terror attack such as the November Paris attacks, plenty of travel and transport companies responded to customers concerns with humanity, allowing them to postpone their bookings.
However, with the more global threat of terror it can be good practice to have a back-up plan should you need to cancel or delay your trip.
As well, it may be worthwhile looking for accommodation deals that allow 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. Although these won't neccessarily have flexible cancellation policies, the operator will be under 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. Keep reading to see who covers what. If your insurer is not on the list, it's crucial to review your policy coverage, as every insurer will vary in their benefits.
In any case, medical cover is essential for travellers headed abroad. The risk of being exposed to illness or injury is simply not one 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 cannot be over emphasised.
Whilst you 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, Smart Traveller can be a very useful resource and one worth checking regularly to stay abreast of any current events. The Australian government can help travellers during and after a terrorist incident, so be sure to register your travels with DFAT as well.
Which insurers cover terrorism?
Every insurer will offer varying degrees of cover. As always, benefits will differ across ranging cover levels. The following summarises the terrorism benefits across a range of travel insurers:
1Cover (underwritten by certain underwriters at Lloyds): 1Cover states that In the event of a terrorist attack or political unrest, there is no cover for cancellation fees and lost deposits, disruption of journey or alternative transport expenses. However, cover is available for all necessary medical/hospital expenses, including bringing you back to your home. Take note that there is no cover for medical/hospital expenses or repatriation under Domestic plans.
American Express (underwritten by Chubb Insurance Australia Limited): As a general exclusion, American Express does not cover any losses related to or arising from terrorism. However, cover may apply when losses are incurred as a result of a transport accident. See PDS for further details.
AIG (underwritten by AIG): AIG will cover any necessary overseas medical and hospital expenses you have to pay as a result of an injury arising from a Terrorist Act. You would also be covered for accidental death if it occurs as a result of terrorist attack as well as loss of income if the injuries you incur render you unable to resume work. However, there is no cover for cancellation fees and lost deposits that arise due to a terrorist attack.
Budget Direct (underwritten by Auto & General Insurance Company Limited): There is no cover for cancellation fees, alternative transport or lost deposit expenses that arise due to a terrorist attack.
Columbus Direct (underwritten by Lloyds): Columbus Direct offers limited cover only for medical expenses as a result of an injury resulting from a terrorist attack.
Cover-More (Zurich Australian Insurance Limited): There is no cover for cancellation fees, travel delay, or lost deposit expenses that arise due to a terrorist attack. Cover-More does provide limited cover only for medical expenses as a result of an injury resulting from a terrorist attack.
Fast Cover (underwritten by Hollard Insurance Company Pty Ltd ): Fast Cover do not provide cover for cancellation fees, travel delays, or lost deposit expenses that arise due to a terrorist attack. Cover is available for all necessary medical/hospital expenses, including bringing you home (unless you have purchased Non-Medical or Domestic cover).
InsureAndGo (underwritten by Mitsui Sumitomo): InsureAndGo does not cover any terrorist acts or any loss incurred as a result of a military force or other intervention by a governmental or official authority to intercept, prevent or mitigate any known or suspected terrorist act.
Insure4Less (underwritten by Lloyds of London): Insure4less doesn’t restrict medical expenses cover in the event of terrorism. Insure4less also covers terrorism in countries where the Australian Government does not have a Level 4 "Do not travel" warning. If you have already paid for your insurance and then the Government issues a Level 4 "Do not travel" advice to that destination, there is cover to cancel your trip subject to the policy terms.
Southern Cross Travel Insurance (underwritten by Southern Cross Travel Insurance): SCTI will provide cover for medical and evacuation expenses due to terrorism. Cover for all other expenses related to an event of terrorism are not included.
TID (underwritten by Lloyd’s of London): TID will not pay claims that arise from terrorism that relate to cancellation costs, travel delay or special events. TID will provide cover for medical and evacuation expenses due to terrorism.
Travel Insurance Saver (underwritten by QBE): Whilst Travel Insurance Saver generally excludes cover for terrorist threats, they will cover medical expenses plus costs arising from hijacking, emergency accommodation due to terrorism and cover for luggage and personal effects related to an event of terrorism
Travel Insuranz (underwritten by Lloyd's of London): You are covered, subject to the policy terms and conditions, to travel anywhere that the Australian government does not have a specific "do not travel" advice. So, for example, if you were involved in a terrorist act you would be covered for medical expenses etc.
If the government advice was to change to "do not travel" from a lesser advice, such as 'high degree of caution' or 'reconsider need to travel' then there would be no cover for anything related to the reasons for the advice. Subject to the policy terms and conditions, the Travel Insuranz policy would give you the option to cancel before travel if the advice did change. For the latest government advice, please visit www.smartraveller.gov.au
Virgin Money (underwritten by Allianz Australia Insurance Limited): Virgin Money will not pay claims that arise from terrorism that relate to cancellation costs, travel delay or alternative transport expenses. Cover is available for all necessary medical/hospital expenses, including bringing you home (unless you have purchased Non-Medical or Domestic cover).
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.