Does travel insurance cover natural disasters and acts of war?
Rising tensions with North Korea and a series of natural disasters across the Atlantic have placed Australian travellers on high alert. Those headed to troubled regions have flooded travel insurance hotlines with queries over their cover.
Natalie Ball, director of comparetravelinsurance.com.au, says the company has experienced a surge in queries about events happening around the world.
“Hurricane Irma, the earthquake in Mexico and tensions on the Korean peninsula have understandably rattled nervous Australians heading abroad,” she says. “Insurers will do their best to assist anxious customers at this time but it’s key that you take the time to understand the various exclusions that may apply to your cover.”
North Korean tensions
The series of nuclear tests and ballistic missiles launched by North Korea has triggered global condemnation. Fear that the situation could quickly escalate has caused skittish travellers to question their plans.
“Travellers en route to South Korea, Japan and the United States in particular have expressed uncertainty over the escalating possibility of warfare,” says Ball. “These countries have been specifically targeted by North Korea and as a result travellers have a right to feel uneasy.”
The Australian government has not upgraded its travel warning for South Korea despite the looming threat of violence from its neighbour.
“What we currently know is that the travel advisory to South Korea is at its lowest level. Nevertheless, DFAT is not ruling out the possibility of a provocation. While the government is not suggesting that you should cancel your travel plans, it is advising you to keep a close eye on any developments and to follow the instructions of local authorities once overseas.”
Hurricane Irma and Mexican earthquake
As Texans began recovering from Hurricane Harvey, Irma struck last week at full force, devastating the Caribbean and parts of the US. The hurricane has so far claimed 25 lives and caused extreme damage. The wild winds also triggered a travel shutdown to the region with over 12,500 flights cancelled and more expected.
As Irma’s wrath made its mark, a massive earthquake struck southern Mexico on Thursday night, killing at least 90 people and shattering towns and villages.
“Both Irma and Mexico’s earthquake have had catastrophic consequences for communities across the region,” says Ball. “Those travelling to or currently amid affected areas are advised to follow authorities’ advice and register their plans with Smart Traveller.”
Cover for war and natural disasters
Travellers questioning their provisions amid troubled times should note that travel insurance will generally exclude cover for losses from war and terrorism. However, those affected by natural disasters would be better positioned to claim.
“Insurers are usually forthcoming in what they will and will not cover and as a rule acts of war are usually excluded from all benefits. However, natural disasters are usually covered events, provided you were not aware of them at the time when you purchased your policy,” says Ball.
The circumstances of each traveller’s claim would be assessed on its own merit, she says.
“Insurers will not usually reject a medical claim if you were caught up in an unforeseen terrorist attack of some sort. But if you were already aware of any political conflicts or troubles looming at your destination and continued to travel anyway, your claim could be rejected. On the other hand, if a situation was to flare up out of the blue you’d have a far stronger case on your hands.”
Time is of the essence
Those affected by either Hurricane Irma or the earthquake in Mexico would have provision to cancel their holiday provided they purchased a policy before their insurer’s cut-off date. Cut-off dates will vary slightly but insurers will usually set these once an event is considered “known”.
Ball says that cut-off dates are a reminder that the earlier you buy travel insurance, the better.
“Savvy travellers should remember that it’s always better to buy travel insurance well in advance. Those purchasing cover as a reaction to a natural disaster would most likely not be covered for that specific event.”
Travellers who had bought a policy in advance, before their insurer’s cut-off date, could claim on non-refundable and out-of-pocket expenses incurred as a result of an earthquake or hurricane. Most crucially, those caught up in the midst of a natural disaster would have cover for potentially exorbitant medical and emergency evacuation costs.
Travel warnings explained
Although DFAT has not upgraded its travel warnings for South Korea, Mexico or the US, Ball says that Australians should be wary of travelling against government advice.
“If you’re planning to travel to troubled areas keep a close eye on the latest advice issued by DFAT. Once a country has been added to a high-risk category that means you will most likely have limited consular assistance over there. Travelling to a potential war zone or a disaster zone despite government warnings should be strongly reconsidered.”
While travelling against government advice is greatly discouraged, you may still have provision to claim on your travel insurance under particular circumstances. For example, a heightened warning level due to a threat such as terrorism would not restrict your ability to claim on a lost or stolen camera or a bout of food poisoning in that region. However, trip cancellation claims from those no longer wishing to travel (due to an upgraded travel warning) would most likely not be considered.
Your travel essential
Despite cover exclusions surrounding war and terrorism, Ball says travel insurance remains important, particularly during times of crisis.
“These global events highlight the unpredictable nature of travel. The possibility that you will fall ill or require emergency assistance abroad shouldn’t be dismissed.
Healthcare costs overseas can be frighteningly expensive and without travel insurance you run the risk of accumulating massive debts in a foreign and unsupported environment. When in doubt, heed the words of smartraveller.gov.au: If you can’t afford travel insurance, you can’t afford to travel!”