This question is beginning to raise it’s ugly head as a result of Russian actions in the Ukraine and America’s possible economic sanctions. For the past several years some travel insurance companies have begun to introduce the following wording in the policies:
“Federal law prohibits unlicensed travel to sanctioned countries by U.S. citizens and permanent residents. Therefore, any expenses incurred or claims made related to travel to a sanctioned country are not covered under this plan, unless the insured is traveling under a license issued by the U.S. Department of Treasury Office of Foreign Asset Control.”
Some companies then refer the traveler to the US Department of the Treasury web site that shows current sanctions: www.treas.gov/offices/enforcement/ofac/
Going to that site yields a list of Countries that have varying types of economic sanctions and are now not covered by some travel insurance plans. However, according to the Department of Treasury’s FAQ travel insurance can be sold to all destinations except Cuba and Cuba is permissible if the traveler has the proper OFAC license. While some travel insurance companies conform to this standard others extend the prohibition to other Countries that don’t have the same level of economic sanctions; such as Iran, Liberia, North Korea, and Syria. Are the travel insurance companies using economic sanctions as a guise to not cover travelers to Countries that might have a higher risk or might be politically undesirable?
So will Russia soon follow? Russia has been a proven tourist destination for many years and is considered more desirable than Iran or the other listed countries. Will the weight of the market override the travel insurance companies past decisions? We’ll have to wait and see.