Can Travel Insurance Really Protect You In the Event of a Terrorist Attack?
As we hear more and more reports around the world of terrorist attacks occurring in popular tourist destinations dear to our hearts such as Paris, London and Barcelona, it becomes more difficult not to let fear into our hearts as we plan our next family vacations overseas. Fortunately, in response to the risks of modern-day terrorism and to assuage the concerns that many would-be travellers have, insurers have begun to include terrorism covers in their travel insurance plans.
But these terrorism covers are a little more complicated to understand than they might initially seem, with all kinds of stipulations, restrictions and exceptions making it difficult to know for certain you'll be covered. To make this issue less opaque, our team at ValueChampion took it upon ourselves to figure out exactly how Singapore travel insurance plans address the issue of terrorism.
What is a "terrorism cover," anyway?
"Terrorism cover" is a pretty vague term, giving off the impression that an insurer will just pay out a lump sum of cash in case you happen to get caught somewhere there's a terror attack. But this is not the case. By "terrorism cover," most insurers mean that they include terrorist acts as a legitimate reason to file a claim for losses under already-existing categories within their travel insurance policies. These typically - but not always - include the medical expenses cover, personal accident/death benefit, emergency medical services or evacuation cover, and/or trip cancellation cover. However, some insurers make specific provisions for their terrorism coverages, acknowledging that damages, and injuries to your person and your property resulting from a terrorist attack may not fall neatly into the typical categories mentioned above. You'll want to read the particulars of your travel insurance policy to make sure.
When are you not covered by travel insurance?
You may not be aware that just because your travel insurance policy includes a terrorism cover does not necessarily mean you'll be covered by your plan in the event of a terrorist attack. There are multiple restrictions and exceptions that can make things significantly more complicated. For example, most insurers in Singapore have a list of countries that they regard as being so dangerous and risky that they will not insure your travel there. But while you'll often see the same countries popping up on these lists of excluded countries (Cuba, Iran, Iraq, Sudan, Syria), there can be slight differences among insurers. Some insurers will cover travel to North Korea, for example, while others specifically call out Nepal as a country they will not insure travel to.
Generally speaking, if a terrorist attack occurs in your destination, your insurer will pay out for any losses sustained up to the policy's limits. But it's important to keep in mind that an insurer could refuse to pay out if you travel to a country that does not necessarily appear on these blacklists if they are still reasonably considered to be a very bad idea to visit at the time of your trip. For example, if the Singapore Ministry of Foreign Affairs issues a travel advisory explicitly warning or recommending against travel to a country not on that list, an insurer may justifiably argue that you should have heeded their advice before recklessly or negligently travelling somewhere dangerous.
Fear or rumor is not usually a reason insurers accept as a legitimate reason to pay out for something like trip cancellation. If a terrorist attack happens in Turkey just days before your trip to Istanbul and you decide last-minute against going, most insurers will not pay out for trip cancellation just because you're afraid.
Finally, it is very important that you be clear about how exactly your insurer defines terrorism. Many insurers make a distinction between "terrorism" and "war," "rioting" or "civil protest," for example, potentially covering losses sustained due to acts of terrorism but not those sustained due to acts of war. Any injuries or losses you sustain for reasons or motivations they deem to be more personal than political/ideological in nature are also unlikely to be included in their terrorism cover. And some insurers make special exception for terrorist attacks that employ nuclear, biological or chemical agents, refusing to include them in their terrorism cover. You can find out each ones through careful scrutiny of the "General Exclusions" section of your insurer's policy wording.
For your reference, here is a fairly generic example quoted verbatim from Etiqa's travel insurance policy wording that can show you how many insurers may define and discuss "acts of terrorism" within their policies:
"'Act of Terrorism' means an act, including but not limited to the use of force or violence and/or the threat thereof, of any person or group(s) of persons, whether acting alone or on behalf of or in connection with any organisation(s) or government(s), committed for political, religious, ideological or ethnic purposes or reasons including the intention to influence any government and/or to put the public, or any section of the public, in fear."
Which travel insurance plans cover terrorism?
There is a high degree of variation in how different insurers address the issue of terrorism within their travel insurance policies. As we found out when digging into this topic, some insurers provide a terrorism cover while others don't at all. Some include nuclear, biological and chemical agents/causes within their terrorism cover while others expressly do not. And some refuse to insure travel to a greater quantity of high-risk countries than others do. But there's surprisingly little information available for Singaporean consumers to find out at a glance which insurers cover what. Typically, you'll have to dive into an insurer's policy documents to get the skinny on their terrorism cover or policy.
To spare you the time and trouble of poring through pages and pages of policy wordings, we did the research ourselves, collating information from 12 of the biggest travel insurers in Singapore into the following table and organised loosely from most generous/accommodating policy to least.
|Insurer||Terrorism covered?||How much?||Does cover include losses sustained from nuclear, chemical or biological agents/causes?||Which countries are excluded?|
|NTUC Income||Yes||Depending on the tier of plan bought, from S$150,000 to S$500,000 for an adult below 70 years old, from S$50,000 to S$200,000 for an adult 70 and above and from S$75,000 to S$125,000 for a child||Yes||Afghanistan, Congo, Cuba, Iran, Iraq, Liberia, Sudan, Syria|
|FWD||Yes||Up to the policy limits for the relevant category||Yes||Any country where the Ministry of Foreign Affairs advises against travelling or recommends postponing travel to|
|Aviva||Yes||Up to S$50,000 for Lite plan, S$100,000 for Plus plan and S$500,000 for Prestige plan||Yes||Afghanistan, Cuba, Democratic Republic of Congo, Iran, Iraq, Liberia, Sudan, Syria|
|AXA||Yes||Up to policy limits for the relevant category||Yes||Afghanistan, Cuba, Democratic Republic of Congo, Iran, Iraq, Liberia, Sudan, Syria|
|Etiqa||Yes||Depending on the tier of plan bought, from S$200,000 to S$400,000 for an adult below 70 years old, from S$30,000 to S$75,000 for an adult 70 and above and from S$50,000 to S$100,000 for a child||Not nuclear||Afghanistan, Cuba, Democratic Republic of Congo, Iran, Iraq, Liberia, North Korea, Republic of the Congo, Somalia, South Sudan, Sudan, Syria|
|Chubb||Yes, except for cover for trip cancellation||Depending on the tier of plan bought, from $12,500 to S$75,000 for an adult below 65 years old and from S$2,500 to S$15,000 for an adult above 65 years old or a child up to 23 years old||Yes||Cuba|
|Allianz Global Assistance||Yes||Up to policy limits for the relevant category||No||Afghanistan, Cuba, Democratic Republic of Congo, Iran, Iraq, Liberia, Sudan, Syria|
|Budget Direct||Yes||Up to policy limits for the relevant category||No||Afghanistan, Democratic Republic of Congo, Iran, Iraq, Somalia, Sudan, Syria|
|AIG||Yes, except for Classic plan||Up to policy limits for the relevant category||No||Cuba, Iran, Syria, Sudan, North Korea, and the Crimea region|
|DirectAsia||Unspecified||Unspecified||No||Afghanistan, Democratic Republic of Congo, Iran, Iraq, Nepal, Somalia, Sudan, Syria|
|HL Assurance||No||None||No||Afghanistan, Congo, Cuba, Iran, Iraq, Liberia, Sudan, Syria|
If you want to read the specifics of a particular insurer's policy, you can find more information in the policy documents downloadable from their website.