After the November 2015 terrorist attacks in Paris, the phones at the call center of InsureMyTrip.com started ringing more than usual. Travelers were asking the online insurance broker whether they could buy travel insurance that would allow them to cancel a planned flight and receive a full refund in the event of a terrorist attack at their destination. The callers also wanted to know whether travel insurance would cover unexpected expenses due to related delays and whether the insurer would cover the cost of fleeing a country, should that be necessary.
Most insurance plans do cover trip cancellation if a terrorist attack prompts you to back out, says Lynne Peters, an insurance product manager at InsureMyTrip.com. But she points out that you need to ask about this because some lower-priced policies might not include it.
If you are concerned about the risk of terrorism while you travel, check the terms of the insurance policy you're considering before making the purchase. Be sure to review:
- When the policy needs to be purchased. If you are purchasing tickets for a flight one month from now, buy your travel insurance at the same time. If you go ahead and buy the ticket but wait to purchase the insurance until closer to your departure date your ticket will not be covered in the event of a terrorist attack.
- Your itinerary. Terrorism coverage allows cancellation if an attack takes place in any of the cities on your itinerary, which includes stopovers. But it may not cover you if you are going to Paris, say, and a terrorist attack takes place in a different French city.
- Emergency-medical-care coverage. Read the fine print and ask the sales agent if the policy will cover payment for your care up front, which some overseas hospitals require. A good number of travel insurance policies will pay the medical facility directly.
- The “cancel-for-any-reason” option. While this clause can increase your travel insurance premium by as much as 50 percent, it also gives you the greatest benefit. You can cancel your plans and get a full refund whether you’re worried about terrorism or simply have a change of heart about taking the trip.
While terrorism might be top of mind these days, it’s not the main reason consumers purchase travel insurance. About 25 percent of travelers buy insurance for international travel, according to Jim Grace, the founder of InsureMyTrip. The insurance typically covers trip cancellations due to a medical illness, hurricanes, and other natural disasters. It can also protect you in the event of an unforeseen epidemic such as a SARS or H1N1 outbreak or say, civil unrest, such as the Arab Spring in Egypt.
If you decide to purchase insurance, think carefully about where to buy it. If you buy insurance from a travel agent, you'll probably be offered a small selection of policies from one company and you may not get the coverage you want. A site such as InsureMyTrip.com, however, offers more than 250 polices from 29 different insurance companies, so you’ll have a wider array of coverage and prices to consider.
How much will it cost? Expect to pay about 7 to 10 percent of your prepaid nonrefundable costs. If you pay $8,000 for airline tickets, hotel, and perhaps a tour your travel insurance could cost you $560 to $800. If you are over 40 years old or you are traveling for, say, a month versus a week, the premium will likely be higher.
If you're traveling overseas, you'll have some other considerations as well. Since many U.S. health insurance policies don't provide coverage overseas, you might want to buy travel health care insurance. You'll have the option of choosing a policy with no deductible or policies with up to $1,000 deductible for health care expenses. Be sure to find out the maximum the policy will pay out. Something else to consider is whether the policy covers transportation to the health care facility, which could be exorbitant depending on how far you need to travel.
Finally, if you have any chronic illnesses or medical conditions, look into getting a pre-existing medical condition waiver with your policy. That way, even if you become ill from a condition you have long been treating, you'll still be covered. To be eligible, however, you’ll have to buy your travel insurance within seven to 30 days of making your first payment for your travel.