Your travel insurance might not cover you in a terrorist attack.

In August this year, seven-year-old Australian boy Julian Cadman was confirmed among the seven victims of a terrorist attack on Barcelona’s crowded Las Ramblas boulevard.

His mother, Jumarie (‘Jom’), was severely injured when a van careened through the tourist hot-spot, leaving the grieving woman facing months of expensive operations on her fractured legs. With this, and the costs associated with burying the little boy, family friend Scott Bowman launched an online fundraiser to help ease the Cadman’s financial burden.

“The concern we have got at the moment is their travel insurance might not cover acts of terrorism and Jom is going to have ongoing medical expenses,” Bowman told The Daily Telegraph at the time.

It’s a cold, hard reality that acts of terrorism, like that which killed little Julian, now pose a risk to those travelling to once-peaceful destinations. Yet still, most insurers won’t foot the bill should those people become caught up in the chaos.

While some may offer limited cover – say for some medical expenses – several have a blanket exclusion on any losses relating to a terrorist act or threat. In other words, they won’t pay a cent.

Campbell Fuller, General Manager Communications and Media Relations at the Insurance Council of Australia, the industry’s representative body, explained that this type of exclusion is nothing new.

“Travel insurance is designed to be a relatively low-cost product that covers travellers for everyday instances,” he told Mamamia.

“Traditionally, travel insurers have not covered civil unrest, acts of war or terrorism. The reason for that is that it’s hard to assess the risk, and insurers base everything on risk.”

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Not all insurers.

Fuller stresses, however, that there’s “no such thing as a vanilla or standard travel insurance policy”, that each will differ on what it covers and to what extent.

“Many policies will cover medical costs that relate to terrorism, some might also pay for additional travel and accommodation costs, lost luggage and repatriation, and a small number may also cover cancellations due to acts of terrorism. So there’s a wide range of products on the market,” he said.

A comparison of policies from major insurers shows that most will provide heavily restricted cover, and will not fork out for cancellation fees, lost deposits, travel delay or alternative transport expenses relating to an act of terrorism.

Some of the most comprehensive (and typically more expensive), meanwhile, will include cover for accidental death, loss of income if you are unable to resume work and overseas medical/hospital expenses. However, Fuller notes that this is rare and generally only applies to those who have already started their trip when the incident occurs.

What should you look for in a policy?

First of all, don’t be swayed by the cost. As Fuller said, “No policy is the same, and buying based on price alone is unlikely to give the [consumer] the policy that suits their needs.”

Instead, the most important factor when cross-shopping is the Product Disclosure Statement relating to each policy – it contains everything you need to know about what you will and won’t be covered for.

As tedious as it may sound, read each one thoroughly (they’re all generally available online) and pay particular attention to ‘exclusions’. You can also contact the insurer with questions.

This is equally important for those who rely on insurance issued via their credit card provider, as there will still be qualifying rules, limits, and different inclusions and exclusions.

What else do travellers need to consider?

It’s crucial to check the Federal Government’s Smartraveller website for up-to-date advice and warnings relating to your destination. These involve four levels: Level 1 – Exercise normal safety precautions; Level 2 – Exercise a high degree of caution; Level 3 – Reconsider your need to travel; Level 4 – Do not travel.

These warnings are designed to keep you safe and should not be ignored. They may also affect your insurance policy.

According to Finder.com.au, “Regardless of the level of cover, all [insurers] will deny your claim if you travel to a country with a Level 3 or 4 advisory and experience a terrorist event.”

Remember that Australian embassies and consulates can only provide limited assistance, and that the Government won’t pay for your overseas medical treatment or medical evacuation. If you aren’t adequately insured, you or your family will be fully responsible for covering any such costs.

If you do need to make a claim…

Fuller said, “If travellers have been affected by terrorism or are considering cancelling a trip because of terrorism, the first thing they should do is contact their travel provider or accommodation provider to seek refunds or credits or alternative travel arrangements, and then they can contact their insurer for guidance.”

Will the industry catch up to the threat?

The Insurance Council of Australia certainly believes so. Sadly, it’s a matter of each incident leading to better understanding.

“Consumer awareness of terrorism as an issue is growing and consumer expectations around the inclusion of terrorism in travel insurance policies is also growing,” Fuller said.

“Where there is consumer demand for a product and insurers better understand the risk and how to price that risk in a policy, the more likely it is that we will start seeing more insurers having terrorism-related inclusions in their policies.”

For more information about choosing travel insurance and for general travel advice and warnings, please visit the Smartraveller website.

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