Fear is Not Covered by Travel Insurance

A new study finds that there are some serious restrictions on what is covered by a typical travel insurance policy.

While the possibility of terrorism may cause people to buy the insurance, many that do find that what may seem to the customer as perfectly legitimate, covered, trip interruption events are actually seen by the insurance company as business as usual.

In a general sense, it can be said that fear is not a covered event.

Online insurance comparison expert Squaremouth points out that there are distance triggers that determine when a terrorist event is covered by travel insurance.

In many policies, “…terrorism coverage only applies if the incident occurred in or near a city on the traveler’s itinerary.

Most policies also require the terrorist event to occur within 7-30 days before the traveler’s departure, while others exclude coverage if there has been a recent terrorist attack in the city,” the company said, in a release.

Travelers who wish to cancel their trip because of a recent terrorist attack often find that they are out of luck: their travel insurance will not cover the cancellation – even if the terrorist even took place at the very same travel destination.

Squaremouth suggests that travel insurance buyers look for – and buy – an optional Cancel For Any Reason upgrade for their policies.

“This benefit allows travelers to cancel their trip for any reason, including those that aren’t covered under standard Trip Cancellation policies,” Squaremouth officials said.

However, this option will only reimburse travelers up to 75 percent of their trip costs. It also requires that they cancel their trip at least 48 hours in advance.

So, there are restrictions even when you pay more for this “Cancel for Any Reason” coverage. The lesson here is that travelers should read the fine print on these policies before purchase.