# Thursday, July 24, 2014
                 
Terrorism and Travel Insurance We have been getting a few inquiries lately from Canadians regarding travel insurance plans and acts of war or terrorism.
 
As a result we’ve decided to blog about travel insurance and terrorism to shed some more light on this subject.

Types of Travel Insurance Coverage

We often hear the question: "does travel insurance cover terrorism"? This is a very general question, and the most accurate answer is that travel insurance both does and doesn’t cover costs resulting from terrorism or an act of war. It really depends on the type of travel coverage and the insurance company involved.

To clarify, there are different types of coverage that comes with a travel insurance plan, and each coverage type may have different exclusions or limitations resulting from terrorism or an act of war.
  • Emergency medical coverage: this is the core coverage that covers the cost of an unexpected medical emergency from sickness or an accident. Oftentimes this medical coverage is excluded in the case of a terrorist incident or act of war.
     
  • Trip cancellation/interruption (included in Inclusive plans): covers the cost of cancelling or interrupting your trip (e.g. motel rooms, airfare, etc.). Many travel insurance plans will cover cancellation costs due to terrorism or an act of war with certain limitations.
     
  • Accidental death and dismemberment (included in Inclusive plans): payable benefits in case of death or some dismemberment such as the loss of fingers, toes, etc… Most times this coverage is excluded when due to an act of war or terrorism.

Definitions of "Terrorism" and "Acts of War"

Each insurance company has its own definitions for acts of terrorism or war, so it is important to know how your travel insurance company defines these things.

Generally speaking this is how these acts are defined:
  • "Act of Terrorism": any act that is committed for political, religious or ideological reasons that causes death or injury to the public.
  • "Act of War": an armed conflict between two or more countries or regions.

Coverage for Costs Due to Terrorism or Acts of War

As touched upon previously, what costs are covered due to a terrorist act or act of war depends on the insurance company and what type of coverage you are talking about.

We can make the following general statements that are true for many, but not all, travel insurance plans:
  1. Trip cancellation and trip interruption costs due to an act of terrorism or act of war are usually covered. However, there are usually limitations such as:
     
    • Act of terrorism must occur within 30 days of your trip departure.
    • There cannot be another act of terrorism at your destination that occurred within 90 days prior.
       
  2. Note that trip cancellation/interruption is also covered if your government issues a Travel Warning for your destination after you purchase travel insurance.
     
  3. Emergency medical costs and AD&D (accidental death and dismemberment) resulting from an act of terrorism are either not covered or there are limitations. These limitations usually involve aggregating all travel insurance claims by an insurance company for one specific act of terrorism and limiting the total insurance coverage for that one particular event.
     
  4. If your government issues a Travel Advisory for your destination and if you buy standard travel insurance after the warning is issued then there will not be any coverage for costs incurred due to terrorism. Note that there are specialty travel insurance plans specifically for terrorism.

Government Travel Warnings: Immediate Exclusion

If a country or region is experiencing turmoil that poses potential significant harm to travelers then most countries will issue a Travel Advisory, warning their citizens to avoid that country or area.

If your government has issued an official Travel Warning for a country or region then standard travel insurance plans will not cover anything to do with an act of war or act of terrorism if you choose to travel to that country.

To see Travel Warnings for Canadians please click here. For American Travel Warnings please click here.

Our Carriers and Coverage for Terrorism and Acts of War

The following summarizes coverage for costs resulting from terrorism or acts of war for the insurance companies we represent as Canadian insurance brokers.

TIC Travel Insurance Plans:

  • Benefits not payable for costs incurred due to an act of war or a terrorist incident caused directly or indirectly by nuclear, chemical or biological means.
  • All other acts of terrorism are covered. However, all acts of terrorism within a 72-hour period have an aggregated payable limit of $2.5 million. There is also an annual limit that can be paid out due to an act of terrorism of $5 million.

Manulife Financial Travel Insurance Plans:

  • Limited coverage for Emergency Medical Insurance, Trip Cancellation & Interruption
  • Similar to TIC there are aggregated limits for all travel insurance policies issued that have claims resulting from the same terrorist incident
  • Exclusion: costs resulting directly or indirectly from nuclear, chemical or biological means

Ontario Blue Cross Travel Insurance Plans:

  • Similar to ML and TIC there is an aggregated payable limit for all travel insurance policies that have claims resulting from the same terrorist incident within a 72 hour period (maximum is $5 million). There is also an annual limit of $10 million
  • The payable benefit for a loss resulting from terrorism is 50% of the standard benefit

GMS Travel Insurance Plans:

  • Does not cover any expenses (including trip cancellation costs) resulting from an act of war, terrorism or "foreign rebellion".

RSA Travel Insurance Plans:

  • Limited coverage for costs resulting from acts of terrorism.
  • Benefits not payable for costs incurred due to an act of war or a terrorist incident caused directly or indirectly by nuclear, chemical or biological means.

Conclusion

We hope you found this blog article helpful. If you have any questions regarding travel insurance and acts of terrorism or war please feel free to contact us. As brokers we are here to help!
 

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