How Terrorism Can Affect Your Travel Insurance Plan

Different situations can have different effects on your insurance

By understanding how terrorism and political unrest affect your travel insurance, you can make sure you've got the proper coverage in the event of an emergency.
Jacom Stephens/E+

Nobody likes to think of international travel as a hazardous activity. But in the modern world we live in, danger can always be lurking around the corner. And as recent activities around the world have demonstrated, terrorism is a new threat that travelers constantly face.

Savvy travelers visiting countries under political instability understand that travel insurance is not an optional purchase - it is a must, in order to be protected from the worst case scenario. But what many do not understand is that basic travel insurance may not assist them in the event of an act of terrorism.

How Travel Insurance Providers Define Terrorism

How an average person defines terrorism may not be the same definition shared by your travel insurance provider. In many situations, your travel insurance provider may have multiple definitions for different situations, such as such as "civil disorder" and "terrorism."

In many cases, your third-party travel insurance plan (a policy purchased direct from a travel insurance provider, not necessarily your travel provider or credit card company) will cover terrorism as a covered reason for trip delay and trip cancellation. However, the definitions may not be the same between providers. For instance, Travel Guard defines terrorism as: "Any act of violence that results in loss of life or major damage from a person acting in a way to overthrow a government or gain control of it." If your situation does not meet that definition, then it may not be considered terrorism - meaning you may not qualify for benefits.

When you purchase a travel insurance plan, make sure you understand what is and is not covered when it comes to an act of terrorism.

Purchasing Travel Insurance Ahead of a Situation

Many experts suggest purchasing travel insurance well ahead of a situation. But did you know that purchasing your travel insurance as soon as you book your trip could qualify you for all the benefits you're entitled to?

Much like a hurricane, many travel insurance providers consider political instability and acts of terrorism as foreseeable events. Once an event takes place that meets their definition of civil disorder or terrorism, such as a travel warning from the Department of State, the situation becomes foreseeable - meaning they may no longer offer coverage for your unique situation. For example: Travelex recently released a statement staying that travelers who may be going to Israel and are "...inquiring about purchasing a Travelex protection plan after July 8th, 2014, coverage will not be afforded as the current events are considered foreseen." Because the situation is ongoing and foreseeable, Travelex will not extend benefits to travelers going to Israel.

By purchasing your travel insurance early, you can make sure that your travel is covered under the worst case situations, no matter what. In some cases, purchasing a travel insurance policy within days of putting down your first deposit on your trip may be the only way to get benefits for terrorism. Be sure you know how purchasing early can qualify you for individual policy benefits.

Cancel for Any Reason Travel Insurance and Terrorism

Another situation to be cautionary of is how benefits for terrorism and civil unrest are applied to your travel insurance. Many travel insurance providers are very strict to their definitions of terrorism and civil unrest. If a situation makes you uncomfortable, but does not meet their definition to invoke benefits, then you may not qualify for trip cancellation benefits.

If you are concerned about a breaking situation prior to your travels that could make you uncomfortable, then consider purchasing a travel insurance plan with Cancel for Any Reason benefits. While trip cancellation may be limited to the definitions on the policy, Cancel for Any Reason allows you to cancel on your terms, and recover some of your travel investment. If you are considering purchasing Cancel for Any Reason, be sure to purchase your policy alongside your first travel plans: many plans have a time limit in which to purchase your benefits.

By understanding how travel insurance views acts of terrorism and civil unrest, you can make sure you're getting the most protection wherever you go in the world. While we certainly hope that you're never caught in one of these situations, preparation and understanding today can prevent regret tomorrow.