Are Terror-Related Events Covered By Travel Insurance?

Will travel insurance cover acts of terrorism? Only in certain situations, and when qualified by the travel insurance provider.
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The recent wave of terrorist acts, combined with the State Department’s issuance of a worldwide travel alert, has caused many travelers to feel nervous about future trip plans. The attacks in Paris in November 2015 served as an unfortunate reminder of the impact terrorism can have on travel.have turned to travel insurance  Many are looking to travel insurance for peace of mind - but can they find it through a normal policy?

Travel insurance may reimburse travelers for a canceled trip due to a terrorist act, but policies are very specific in their definitions of what qualifies for terrorism coverage. Most policies require the act to be deemed terrorism by the U.S. government in order to be eligible for coverage. Without this important distinction, your attempt at a claim could be denied. 

What about incidents that don’t clearly meet this definition? Recent events provide examples of when a situation is unfortunately too uncertain to be covered on a standard insurance policy. 

Travel and Terror Alerts: Threat of Terrorism Too Uncertain for Coverage

The perceived threat of terrorism can cause increased security measures and shut down tourist attractions, but this alone may not necessarily trigger your travel insurance coverage. While the State Department’s worldwide travel alert stated “possible risks of travel” due to terrorism, a travel alert or warning is not enough to trigger coverage.

 

The same can be said for a terror alert. Based on an “imminent threat” of terrorism, Brussels, Belgium, raised its terror alert to the highest level in November 2015, putting the city on lockdown. Some public transportation and many public buildings closed down, but flights continued to arrive and depart as scheduled.

In this example, because no terrorist attack occurred, the event would not be a covered reason to cancel a trip to Brussels under the terrorism benefit of a travel insurance policy.

Under Investigation: Speculation of Terrorism Too Uncertain for Coverage 

Sometimes incidents are unclear as to whether the cause was a terrorist act or something else altogether. In October, a Russian plane departing the resort town of Sharm el-Sheikh, Egypt, crashed just 23 minutes after takeoff. Initial reports debated whether the crash was caused by a missile, a bomb, or a mechanical issue. 

Despite later speculation that it was indeed caused by a bomb, the crash was never officially declared “terrorism” by the U.S. government. Even with a claim of responsibility from ISIS and the recognition of the crash as terrorism by the Russian government, the event would still not meet most policies’ definitions of terrorism. 

In the event of a passenger plane crash, official investigations can take many months, if not longer. For example, Malaysia Airlines Flight 17 was shot down by a missile, but never officially declared an act of terrorism by the U.S. government. Malaysia Airlines Flight 370, which disappeared under uncertain circumstances, remains an open investigation.

In these kinds of scenarios, travelers will likely have to make a decision about their travel plans without the assurance of cancellation coverage.

Is There Any Way to be Covered for Uncertain Events?

While it can increase the premium by about 40 percent, a Cancel For Any Reason coverage upgrade would allow travelers to cancel their trip for uncertain situations that may alter their travel plans or affect the enjoyment of their trip. Under this benefit, travelers can cancel their trip for an otherwise uncovered reason and receive reimbursement for up to 75% of their trip costs. However, the traveler must cancel their trip within 23 days of their scheduled departure date. To be eligible for Cancel For Any Reason, travelers must purchase their policy within 14 to 21 days of their initial trip deposit and must insure 100% of their trip costs.

About the author: Rachael Taft is the content manager for Squaremouth.com, an online company that compares travel insurance products from virtually every major travel insurance provider in the United States. More information can be found at www.squaremouth.com.