Half of travel insurers don't cover terrorism

The case of the injured British couple abandoned by their insurer in the Maldives is a sharp reminder to read your policy small print

by Ginny McGrath

News that the British couple injured in a bomb in the Maldives this weekend will not be flown home by their insurance company will have travellers scrambling to check the small print on their travel insurance policies. And rightly so – only 50 per cent of British companies that offer travel insurance cover terrorism.

For many holidaymakers an unexpected event that results in loss of life, property, or injury is what travel insurance is there to cover, yet for many companies it still constitutes force majeure – which absolves them from paying up.

The situation is improving though: “Five or ten years ago it would have been very unlikely that insurance companies would provide cover in the event of terrorism, but there is growing demand for it,” says Malcolm Tarling, a spokesman for the Association of British Insurers.

“There is an increasing availability of terrorism cover among travel insurers, with over half now providing it as standard, so if injured you will receive medical treatment and/or be repatriated.”

A warning to travellers though: while medical and repatriation expenses are covered by most policies, the cost of cancelling a holiday to a destination that has been affected by terrorism is unlikely to be covered.

The crucial factor in these incidents is whether the Foreign and Commonwealth Office changes its advice to warn against travel to the affected destination. In these cases, the travel company with which the holiday is booked should offer its customers the opportunity to change destinations in the short term, or in some cases offer a refund.

According to Tarling, for those who are not refunded by a tour operator, because, for example, they have booked their holiday independently, some travel insurers will cover the costs of a holiday abandoned due to a change in Foreign Office advice. Again, it's a case of reading the small print.

Following the terrorist attack in the Maldives this weekend, the Foreign Office has not changed its advice, but warns tourists to be vigilant in public areas around the capital, Male. It means that holidaymakers who want to cancel a trip the Maldives would not be able to claim from their insurer.

Owing to the relatively robust approach of British holidaymakers though, it appears at this stage that the bomb has not affected tourist arrivals to the islands. The Deputy Minister for Tourism in the Maldives, Abdul Hameed Zakariyya, claims that British tour operators are reporting no holiday cancellations in the wake of the bomb, which injured 12 tourists.