Terrorism and travel insurance

Does your travel insurance policy cover you for claims that arise from terrorism or the threat of terrorism? Find out how travel insurers treat terrorism and government travel advisories.

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 travel insurers handle terrorist incidents and the extent to which your travel insurance will and won't cover you.

The product disclosure statement (PDS) for your travel insurance policy will explain your insurer's stance on terrorist incidents, but those documents are often complex and confusing. We've highlighted the essential details you need to examine, starting with how travel warnings affect your cover.

Is terrorism covered by travel insurance?

So that leads us to the next question: does travel insurance cover terrorism and if so, to what extent?

Unfortunately, not all travel insurance policies cover terrorist-related incidents. Brands will either have

1. A few have a blanket exclusion in relation to all forms of terrorist activities,
2. Or offer limited cover with restrictions on items such as cancellations and travel delays

A common general 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.

How do travel insurance brands cover terrorism?

Wording regarding terrorism-related exclusions varies but generally falls into two main types. No cover is provided for incidents resulting from either:

• An act or threat of terrorism
• A terrorist act or use of military force or other intervention by a government or official authority to intercept, prevent or mitigate a terrorist act

There are a number of insurers who will cover terrorist-related incidents with some restrictions including:

Provider	Conditions
	You will not have cover if an act or threat of terrorism results in cancellation fees or lost deposits. 1Cover will not pay a benefit for disruption of your journey or alternative transports expenses if it arises from an act or threat of terrorism.
	Acts of terrorism are part of the general exclusions and this is applicable to all sections.
	You're covered for: Accidental death if it occurs as a result of an accident or terrorist act including in-flight cover. Loss of income if you are unable to resume work upon your return due to an accident or terrorist act overseas. Overseas medical, hospital, cash in hospital, dental and related expenses you have to pay as a result of an injury or illness (including injury arising from a terrorist act) which first occurs or becomes apparent after the issue date of your certificate of insurance. You're not covered: If any loss, injury, damage or legal liability is sustained directly or indirectly by you if you are a terrorist or a member of a terrorist organisation. For cancellation fees and lost deposits that arise because of a terrorist act or any loss arising out of the intentional use of military force to intercept, prevent, or mitigate any known or suspected terrorist act.
	You're not covered: For additional expenses, travel delay expenses or alternate transport expenses that arise because of a terrorist act or any loss arising out of the intentional use of military force to intercept, prevent, or mitigate any known or suspected terrorist act. If any loss, injury, damage or legal liability is sustained directly or indirectly by you if you are a terrorist or a member of a terrorist organisation.
	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.
	General exclusion prevents claims arising directly or indirectly from war, invasion, act of foreign enemy, hostilities (whether declared or not), civil war, rebellion, revolution, insurrection or military or usurped power.
	Columbus Direct will not pay any claim arising directly or indirectly from acts of war, terrorism or civil unrest (although there is limited cover for medical expenses and hijack claims in this respect).
	You will not be covered for amendment or cancellation costs, travel delay of special events cover arising directly or indirectly from an act of terrorism or the threat or perceived threat of an act of terrorism.
	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 alternative transport expenses.
	General exclusion prevents claims arising directly or indirectly from an act or threat of terrorism. However, this exclusion does not apply to Section B1 “Medical and dental expenses”, Section D7 “Hijacking”, D8 “Emergency accommodation due to terrorism”, Section F1 “Luggage and personal effects” or under Section C1 “Medical evacuation and repatriation” for the cost of repatriation to or within Australia, if the carrier requires you to be brought back with a medical escort.
	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 alternative transport expenses.
	Cover for claims related to terrorism are generally excluded with the exception of claims against section one (Cancellation and curtailment) or three (Overseas medical expenses and repatriation) unless caused by nuclear, chemical or biological attack or the terrorism/terrorist activity was already taking place prior to your trip or you have caused or contributed to the loss.
	The general exclusions prevent claims for any loss, injury, damage or legal liability is sustained directly or indirectly by you if you are a terrorist or a member of a terrorist organisation. You will not have cover for any terrorist act or any loss incurred as a result of any intentional use of military force or other intervention by a government or official authority to intercept, prevent, or mitigate any known or suspected terrorist act for cancellation your trip before departure, resumption of your trip or travel delay.
	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 alternative transport expenses.
	The general exclusions prevent claims for any loss, injury, damage or legal liability is sustained directly or indirectly by you if you are a terrorist or a member of a terrorist organisation. You will not have cover for any terrorist act or any loss incurred as a result of any intentional use of military force or other intervention by a government or official authority to intercept, prevent, or mitigate any known or suspected terrorist act for cancellation your trip before departure, resumption of your trip or travel delay.
	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 alternative transport expenses.
	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 alternative transport expenses.
	Cover for medical and evacuation expenses due to terrorism $100,000 per policy Acts of Terrorism are excluded from all other section of the policy except for the above provision
	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 services provider insolvency, travel delay expenses or special events.
	The general exclusions prevent claims for any loss, injury, damage or legal liability is sustained directly or indirectly by you if you are a terrorist or a member of a terrorist organisation. You will not have cover for any terrorist act or any loss incurred as a result of any intentional use of military force or other intervention by a government or official authority to intercept, prevent, or mitigate any known or suspected terrorist act for cancellation your trip before departure, resumption of your trip or travel delay.
	TID will not pay a claim that arises because of a loss that arises directly or indirectly from an act or threat of terrorism. This exclusion only relates to cancellation costs, travel delay and special events.
	General exclusion prevents claims arising directly or indirectly from an act or threat of terrorism. However, this exclusion does not apply to Section B1 “Medical and dental expenses”, Section D7 “Hijacking”, D8 “Emergency accommodation due to terrorism”, Section F1 “Luggage and personal effects” or under Section C1 “Medical evacuation and repatriation” for the cost of repatriation to or within Australia, if the carrier requires you to be brought back with a medical escort.
	Under the special events section of your policy you are not covered for a loss that arises directly or indirectly from an act or threat of terrorism.
	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 alternative transport expenses.
	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.
	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 alternative transport expenses.
	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.

Travel warnings: what are they?

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: why are they important?

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.

Travel warnings: What are the different levels?

DFAT grades its travel advice into four different levels. These are:

• Level 1 – Exercise normal safety precautions
  This indicates that the destination poses a similar degree of risk as any normal city in Australia, and normal safety precautions should be observed.
• Level 2 – Exercise a high degree of caution
  While this advisory stops short of warning against travelling to a particular destination, it does indicate that there is a higher degree of risk and greater vigilance is needed. This might include monitoring the local media, planning your daily movements, staying alert and taking additional measures to safeguard your personal security.
• Level 3 – Reconsider your need to travel
  This indicates that a destination is not safe to visit due to serious and potentially life-threatening risks such as violent crime, civil unrest, terrorism, natural disaster or disease. You should consider deferring unnecessary travel to such destinations or, if you must travel, staying as short a time as possible and making your own security arrangements.
• Level 4 – Do not travel
  This advisory means just what it says: Do not travel to this destination. Destinations that are tagged with this warning are extremely dangerous, possibly due to a high threat of terrorism, ongoing armed conflict, violent political unrest or critical levels of violent crime. Travelling to such a destination would be at your own risk and you should not expect consular assistance if you choose to do so.

Countries with Level 3 and 4 warning

Travel warnings: How do travel advisories affect your travel insurance?

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.

Travel warnings: What happens if an advisory changes while you’re away?

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.

Terrorism and insurance in general

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.

Make sure you know your insurers stance on terrorism

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.