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Does travel insurance cover terrorism? (Photo: Shutterstock)

Does Travel Insurance Cover Terrorism?

Given recent headlines, you might wonder: Does travel insurance cover terrorism? And the short answer is, “Yes, but…” with some important variables in that “but.”

Most trip-cancellation or interruption travel insurance includes “terrorism” as a named peril and a “covered reason” for benefits when you might want to cancel or change a trip to a destination that suffers an attack. But whether and how insurance covers you for terrorism depends on two important elements the insurance policy’s fine print: How the insurer defines “terrorism,” and what kind of “terrorism” event triggers coverage. These critical details can vary from policy to policy.

Does Travel Insurance Cover Terrorism? It Depends on Your Definition of ‘Terrorism’

Surprisingly, the big travel insurance issuers are not in lockstep about defining “terrorism.” A random check of policies from the main insurers reveals some major differences. Several companies define terrorism simply as “an incident deemed an act of terrorism by the U.S. Department of State” or rough equivalent. But other companies modify that with extra requirements.

Many policies require that the terrorism event be committed by “a person acting alone or in association with other persons on behalf of or in connection with any organization of foreign government which is generally recognized as having the intent to overthrow or influence the control of any other foreign government.”

Many travel insurance policies specifically require a State Department official warning for American travelers not to travel to the destination country or city suffering a terrorist attack.

Some policies exclude “civil disorder.” Some require that the terrorism event result in loss of life or major property damage in order to be eligible for travel insurance coverage.

Two factors stand out in the fine print in the question of whether travel insurance covers terrorism or a terrorist attack. Almost every travel insurance policy requires formal recognition by the U.S. State Department that an attack is defined as an act of terrorism. But in some cases, the act has to be traced to an organization or individual having an intent to overthrow the control of some government. Either factor could presumably deny coverage in cases many of you would consider to be “terrorism.” And “civil disorder” can often look a lot like terrorism.

Travel Insurance and a Terrorist Attack: What Triggers Insurance Coverage?

As with definitions, policies vary somewhat in how they describe an event that triggers coverage. Several travel insurance policies simply require a “terrorist incident that occurs within 30 days of your scheduled departure date in a city listed on the itinerary of your or your traveling companion’s trip.”

But many include more specific limitations and variations about how travel insurance covers terrorism.

A few policies reduce that 30-day time limit to 14 or even seven days. A few add that coverage travel insurance coverage for a terrorist attack is valid only if a destination city had not suffered an attack within the past 30 days. The standard “in a city” statement is pretty vague, too. Some travel insurance policies specify geographic limits, saying the terror attack must have occurred within  a 50-mile or 100-mile radius of a city on your itinerary.

A few travel insurance policies deny coverage for terrorism if your travel supplier offers a substitute itinerary. And some shift the condition of a government announcement to this portion of the contract.

Travel Insurance and Terrorism: The Take-Away

All in all, trip insurance coverage for a terrorist event can vary substantially among different issuers. Some travel insurance issuers incorporate varying language in different policies. Some low-cost travel insurance policies do not cover terrorism at all.

Clearly, if you’re interested in cancellation or interruption travel insurance that covers terrorism, you have to compare policies carefully. The typical online insurance-comparison search systems generally don’t allow filters for the degree of detail you might want. Instead, you have to look at the “details” or “full policy” pull-downs for each policy for the information you need.

Alternatively, if you want a definitive answer to the question of whether your travel insurance covers terrorism, you can pay extra for cancel-for-any-reason coverage (ranging from terrorism to weather to illness to missing a connecting flight) and leave the go/no-go decision entirely up to you.

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Consumer advocate Ed Perkins has been writing about travel for more than three decades. The founding editor of the Consumer Reports Travel Letter, he continues to inform travelers and fight consumer abuses every day at SmarterTravel.

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