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It's a common question for travellers: will my travel insurance cover me if there's a terrorist incident during my trip? This guide looks at how several travel insurers handle terrorist incidents and the extent to which your travel insurance will and won't cover you. We've highlighted some of the essential details you need to examine, including how travel warnings can affect your cover.
Not all travel insurance policies cover terrorist-related incidents. Most brands will either:
We researched Finder partner brands, and discovered that this is a common exclusion:
You will not have cover for claims that arise as a result of an act or threat of terrorism for cancellation fees and lost deposits, travel delay expenses or special events.
Regardless of the level of cover, all will deny your claim if you travel to a country with a Level 3 or 4 advisory and experience a terrorist event. It's always really important to check your Product Disclosure Statement to see how (and whether!) your chosen brand covers terrorism.
Wording regarding terrorism-related exclusions varies but generally falls into two main types. No cover is provided for incidents resulting from either:
There are a number of insurers who will cover terrorist-related incidents with some restrictions including:
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Travel warnings are issued as government advisories and posted by the Department of Foreign Affairs and Trade (DFAT). The purpose a travel advice issued by DFAT is to provide you and Australians like you travelling or living overseas with information regarding potential threats in more than 170 countries.
These can be threats to security, safety, health or from natural disasters. Government travel warnings are designed to make Australian travellers aware of the level of risk they may face so they can make informed decisions about when and where they travel. Travel warnings are posted on the Australian Government’s website at smartraveller.gov.au
Travel warnings are very important and every Australian traveller should refer to the Smartraveller website, both before you depart and also during your trip.
Travel warnings are designed to keep us safe overseas and should never be ignored. The Australian Embassy is limited in the assistance it can provide to travellers who get into trouble in a foreign country.
They also have a major impact on your travel insurance, as insurers will not cover you if you visit destinations that have warning in place.
For this reason, you should check your destination to see if there is a current travel warning before you book your flight or accommodation. You should also read the PDS carefully to make sure your policy covers you for your destinations.
DFAT grades its travel advice into four different levels. These are:
While insurers will generally cover you for travel to Level 1 destinations and Level 2 destinations, most will not cover you for Level 3 and 4 destinations. This is because they consider the risk too high for them to assume, as there is a strong possibility that you will be putting yourself in harm’s way.
It is important to read your PDS and check that the insurer provides cover for the country you’re travelling to, as not all insurers cover all countries. or example, many insurers don’t cover trips to Cuba.
Travelling without insurance is never a good idea, as run the risk of landing yourself in severe financial hardship if you required medical or hospital treatment in a foreign country.
Even if you have insurance that covers you for travel to your destination, there is always the possibility that a travel warning may be changed or upgraded after you have purchased your policy and booked your flights and accommodation.
Most insurers will cover you for cancellation costs, providing that the travel warning was issued after the start date of your policy.
However, you will not normally be covered for cancellation costs if you cancel your trip because you feel you would be unsafe, even though a travel warning has not been issued or upgraded. You would also not be covered if you fail to take suitable precautions to protect your safety such as curtailing your trip or changing your plans if a travel warning is issued while you are at your destination.
Travel warnings are issued for a variety of reasons and sadly, with terrorism on the rise around the world, it is becoming a prevalent factor in many advisories against travel.
In general insurance, cover for terrorist-related incidents has become a key consideration. In the wake of 9/11, insurers began adding terrorism exclusions to their police. Here's a typical example:
Cover will not be provided for losses relating to an act of terrorism or the threat or perceived threat of an act of terrorism.
In Australia, whether an insurer is required to cover a terrorist-related incident depends on whether it is a declared or non-declared terrorist incident, as defined by the Terrorism Insurance Act. If it is a declared incident, as was the case with the 2014 Lindt Café siege in Martin Place, then some general insurers are obliged to honour claims for terrorism-related incidents, subject to a reduction percentage.
However, travel insurance does not fall under the Terrorism Insurance Act and so it remains at the discretion of the insurer as to whether they exclude terrorism from their travel insurance policies.
Terrorism is a sensitive subject with insurers, with many excluding cover for cancellations and delays and all requiring strict observance of travel warnings to qualify for cover.
With terror-related threats becoming more prevalent every day, it seems likely that terms and conditions surrounding terrorism and travel insurance will become more stringent rather than less so in the future. Plan your travel carefully and make sure your insurance covers your concerns.
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I would love to go to Japan next year I usually book about 11 months in advance and pre purchase tickets such as Disneyland and tours etc. about 2 months in advance. Iam worried about the threat of North Korea,earthquakes,tsumani etc. Is there a policy that covers losses from these tickets as well as air and accom.
Hi Debra!
Thanks for the comment.
Please be informed that generally, most travel insurers provide general exclusion to terrorism-related activities and those countries with travel advisory warnings..
Hence, it is important to discuss this specifically with your insurers to know their policy and exclusions in place.
Hope this helps.
Cheers,
Jonathan