The recent death of al Qaeda leader Osama bin Laden put the world on high-alert for possible reprisal attacks and, as a result, has caused a lot of travelers to cancel vacation plans.
It’s important for travelers to understand whether their travel insurance adequately protects them in the event of terrorism. Some travel insurance policies require a terrorist attack to take place within 30 days of departure.
Policy trip cancellation language varies per policy but an example commonly stated as: “A Terrorist Incident that occurs in a city listed on Your Covered Trip itinerary and within thirty (30) days prior to Your Scheduled Departure Date.”
Travel insurance providers offering the 30-day timeframe for U.S. residents are: Travelex Insurance Services, Travel Guard, MH Ross, Travel Safe, and Travel Insured International. For non-U.S. residents we have USA-Assist and Insuractive.
An important point to remember is trip cancellation coverage will not be available to travelers who cancel or cut short a trip out of fear of a terrorist attack. In this situation, the only coverage available is a benefit called Cancel for Any Reason (CFAR), which allows you to receive a refund of up to 80% of the trip cost even when cancelling for reasons not covered within the standard policy language. To qualify for this coverage a policy must be purchased within 14 to 30 days of an initial deposit payment and you must insure all pre-paid non-refundable trip costs.
One very important point to remember is that to exercise the CFAR option you must notify the insurance company two days (48 hours) prior to the trip departure date.