Travel Insurance and Terror attacks?

On October 2002, a tragedy occurred which forced the travel insurance industry to address an urgent issue, which they had probably hoped not to have to look at. The bombing in Bali was aimed in particular at tourists. This means that travel insurance companies had to look again at how they insure tourists anywhere in the world, as a new risk is apparent which must be covered far better than it has been so far.

Straight after the bombing, Jack Straw, the British foreign secretary spoke about how the insurers' ad hoc responses to disasters such as this is not sufficient any more and needs to be improved. He mentioned how whilst British citizens need to insure themselves against normal risks, terrorism is different. He felt it was necessary to work with the insurance industry to make sure that the pain felt by victims of terrorism and their relatives is not worsened by financial hardship.

If you look closely at the terms on your last travel insurance policy then you will find that if your holiday has to be cancelled due to terrorism, natural disasters or war means then you are not covered. There is no point in even attempting a claim.

Only a handful of companies will actually specifically cover the victims of terrorism for the costs of medical treatment and repatriation. Norwich Union is one of these companies. Thus, you are reliant in the event of a terrorism event on the generosity of the airlines. For example, after the Bali tragedy, the national airline of Indonesia, Garuda, said that 28% of people who were booked to fly the next day cancelled. They then offered a refund to anyone who had booked their flight on or before the day of the charity. But they are not legally required to do that. In response to terrorist incidents the airline industry has been criticised for their lack of consistency in their dealings. Some, like Garuda, may offer refunds, some, like in the early confusing days after September 11th, may not.

This is, of course, relevant to travel insurance, because if you can't get a refund instead of going to a destination where terrorism has just struck, or you want to get home early after a terrorist attack then you may have to pay for it yourself. In this case, your travel insurer may not help you. You must check with your travel insurer before you get the policy. This is especially true if you are going anywhere which could be affected.

The foreign office could declare a destination a no-go area, in which case you have more of a chance of being able to change your flight to a different destination without having to pay for it.

© AskFinancially.com 2008

Travel Insurance

Insurance & Loans

Copyright

Travel Insurance and Terror attacks?

© AskFinancially.com 2008

Travel Insurance

Insurance & Loans

Copyright