European Travel Alert and Travel Insurance – The Real Story

This past Sunday, the United States Department of State issued a Travel Alert for travel to Europe, which advises “U.S. citizens should take every precaution to be aware of their surroundings and to adopt appropriate safety measures to protect themselves when traveling.”

Since the alert there have been several articles written concerning what is covered by travel insurance. Some of the articles have provided good information and some not so good information. Here is what you need to know:

1. Most basic trip cancellation and trip interruption coverage provides coverage for terrorism; however, it is mostly limited to an actual terrorist event which happens in a city on the traveler’s itinerary within 30 days of the traveler’s scheduled arrival. Most policies will cover both domestic and foreign events.
2. Some policies limit coverage to an actual terrorist event which happens in a city on the traveler’s itinerary within 7 days of the traveler’s departure date.
3. Some policies may require that coverage be purchased within two weeks of the first trip payment in order for the coverage to be activated.
4. Some policies may exclude coverage if a terrorist event has occurred within the city or country within the prior 6 months or if a Travel Warning has been issued for travel to that country or region.
5. “Terrorist Event” is defined differently by travel insurance policies however; civil disorder, riots, and war are not covered.

Trip cancellation and trip interruption coverage is a “named peril” coverage that relies on the covered reason, policy definitions, and exclusions to determine coverage. Contrary to some published reports an elevation of the travel alert to a travel warning will not trigger coverage. As a whole, travel insurance policies require an actual terrorist event to occur in order for coverage to apply so even if the Department of State elevates the alert to a warning coverage will not apply without an actual event occurring and then only if it complies with the policy provisions. It may, however, affect future coverage since some policies exclude travel to an area where a Travel Warning has been issued.