Earlier this week, the U.S. State Department issued a global travel alert announcing the threat for terrorist attacks on Westerners and warning U.S. citizens to take precautions while traveling.
The travel alert expires on August 31, 2013, and nearly the moment it was issued, many U.S. travelers were scrambling to check their travel insurance policies and understand the terms under which they might be able to cancel their travel plans – and get a refund – or travel anyway and be sure their emergency medical care will be covered.
Let’s review how this latest global travel alert affects your travel insurance coverage.
A Terrorist Act (by definition) May Not Be What You Think
Travel insurance doesn’t always apply to emergency situations the way many travelers expect it to – especially in cases of terrorism, or political and civil unrest that causes instability in certain regions of the world. Specifically, a terrorist incident is not the same as political or civil disorder or riots.
Understanding how your travel insurance plan defines a terrorist act is critical to understanding your coverage.
See your travel insurance plan’s definition of terrorist act – here is an example copied from the plan description document for TravelEx’s Select plan:
Some travel insurance plans – like Seven Corner’s Round Trip Choice plan – define a terrorist incident like this:
Terrorist Incident: means an incident deemed a terrorist act by the United States Government that causes property damage or Loss of life.
Essentially, the coverage in the plan isn’t in effect unless the U.S. government deems it a terrorist act. So, just because you’d define it as an act of terrorism doesn’t mean your travel insurance provider does.
Changing Your Mind is Not a Covered Reason to Cancel
Most travel insurance policies do not cover trip cancellations in response to a travel alert or travel warning – the terrorist action actually has to occur for the coverage to kick in. For those plans that do include cancellation coverage for terrorist actions, the following rules generally apply:
The travel alert must be issued after your plan’s effective date (meaning you can’t buy travel insurance now because the threat is already a known event).
The terrorist incident must occur after your plan’s effective date and within a certain number of miles of your travel destination.
The terrorist incident must occur within a certain number of days (usually 15-30) of your scheduled departure date.
The same city must not have already experienced a terrorist incident within ninety days prior to the incident that is causing you to cancel your trip.
Those travelers with trips scheduled after the August 31, 2013 expiration of the global travel alert can get coverage for their trip, but remember that buying your plan soon after your first trip deposit is always recommended.
Travelers who purchased a travel plan with ‘cancel for any reason’ coverage can cancel their travel plans no later than 48 hours prior to their departure. ‘Cancel for any reason’ coverage is the only coverage that allows a traveler to cancel for any reason at all and get 50-100% of their money back.
See more about terrorism as a covered reason to cancel your trip and a list of policies with that type of coverage.
Benefits May Not Be Payable for Certain Types of Terrorist Incidents
Travel insurance providers limit their losses for some events using exclusions, which are clearly defined in your travel insurance plan. For example, most travel insurance plans specifically exclude any coverage for sickness, injuries, or other losses due to war, attacks using weapons of mass destruction, nuclear, chemical, biological or other warfare – regardless of who commits the act or whether war has been declared or not.
This means that if a terrorist decides to unleash a nuclear attack where you are intending to travel or are already traveling, your cancellation, your emergency medical treatment, your evacuations, etc. will not be covered by your travel insurance plan – even if it’s defined as a terrorist action simply because of the type of incident.
If You’re Traveling Soon and Have Travel Insurance
This particular global alert was issued on August 2, 2013 and expires on August 31, 2013. If you are traveling within this travel alert’s time frame, especially if you are traveling to one of the areas listed in the global travel alert, which are: North Africa, the Middle East, and the Arabian Peninsula, you’ll want to do the following:
See if you purchased ‘cancel for any reason’. If you decide not to go, you’ll need to cancel your trip no later than 48 hours prior to departure.
Check your plan’s exclusions section to see how your cancellation, trip interruption, emergency medical, and evacuation will be covered in the event of a terrorist attack.
Check your plan’s coverage for political evacuation. In some cases this coverage will provide for your evacuation in the event of government or social upheaval in a foreign country. Remember that the event must occur for the coverage to be available.
If an event does occur within the travel alert’s time frame and you’re traveling, know that extra costs due to travel delays may be covered if the carriers stop all travel for a certain number of hours.
Summing It Up
The issuance of a travel alert or travel warning associated with an increased threat of terrorist attacks does not automatically trigger benefits under your travel insurance policies. Travelers who are concerned about taking their trips in light of the increased threat must have purchased their insurance prior to the alert being issued.
Travelers with plans to travel after the expiration of this latest alert should purchase their travel insurance early – soon after their initial trip deposit date – and consider getting ‘cancel for any reason’ protection in case other alerts are issued and they decide to cancel.