A bomb alert in the UK left thousands of travellers stranded at airports across the country and overseas after flights were either cancelled or delayed. As services slowly returned to normal, many people are counting the cost and wondering whether or not they can claim money back from their travel insurers.
Does my insurance cover terrorism? Unfortunately, not in the majority of cases.
Terrorism is often an exclusion, so most travel insurance customers cannot claim for delays, lost hotel bookings, or incurred costs such as food and drinks.
Some policies do offer cover for disruption caused by the threat of terrorism or acts of terrorism.
The Insurance industry is divided. Some say that they do not provide this cover, as it would be more expensive. Others say that in the thousands of travel claims, a handful a year related to terrorism or terror alerts would make no real difference to prices.
Sometimes airlines do their best to get people on their way and offering to rebook and even refund tickets for flights that were cancelled or delayed. The same with most holidays booked through a travel agent or tour operator.
But if you are one of the increasing number of people making their own travel arrangements, things may be harder. While you should still be able to fly to your destination, you would not be able to claim for any add-ons such as lost hotel bookings or car hire.
Travellers Protection Services - the company that provides insurance products for companies including budget airline Ryanair, cruise firm P&O and the Telegraph newspaper group - has taken steps to help customer, by changing the policy on valuables so that they are covered when a traveller’s entire baggage had to be checked in to a plane’s hold.
Wording, and interpretation of travel policy wordings, is not easy. Does the policy cover terror alerts as well as actual terrorism?
Insurers know that the number of terror alerts has a direct relationship to what spin the UK or US government has on terror, what talks are going on, and what new measures they are trying to force through. If there are gaps between real terrorism alerts, a number of new alerts based on some magical intelligence suddenly appear, as we all have to be kept a bit scared. Differentiating between real and political alerts is impossible, but is one reason why the insurance industry finds the subject of terrorism awkward. They object to paying out what, at the end of the day is your money, just to satisfy a political motivation.
Consumer groups have pressured the government to look into the possible mis-selling of insurance by travel agents and tour operators. One area of concern is that many customers don’t get given enough information about the policies they are being sold by tour operators and travel agents, causing them to believe they are covered when in fact they aren’t.
The insurers trade body reaction to any consumer arguing that not all policies cover terrorism is to say that cover with it is around if you hunt for it. This would be fine if you knew what you were hunting for, but as terrorism is a moving feast and interpreting whether or not a policy actually covers terrorism or terror alerts is difficult. Part of the problem is that we are always on some form of terror alert; it just changes in colour code!
Our advice would be that what is really important is to ensure that your travel policy covers members of your party if you are killed or injured as a result of terrorism or a terror alert. Insurers and others may think you are being awkward asking about the two separately. But think, if there is an alert, but no real incident, and you get run over by a tank or police car, could insurers argue that you cannot claim as there was actually no terrorism?
Your baggage and money are replaceable. If you are delayed, or inconvenienced a bit, does it really matter? You on the other hand, are not replaceable.
Travel insurance: Hot Topic: December 2007
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