Travel insurance: Customers looking for terrorism cover

1 August 2016
Analysis of customer behavior on Canstar’s comparison tables indicates that overseas travelers are increasingly concerned about the possibility of terrorism.

Analysis of more than 30,000 visitors to the travel insurance comparison tables over the past 13 months has found a strong correlation between high profile terror events overseas and Australians’ eagerness to have terrorism coverage as part of their travel insurance policy.

In the wake of the Nice tragedy in July, Canstar noted that the proportion of visitors specifically searching for a travel insurance policy that includes cover for terrorism-related event shot to almost 47% of visitors. In June the equivalent proportion was 26%.

Mitchell Watson, Group Executive for Ratings and Financial Services

“It probably understandable given the tragic events this month in Nice (and perhaps the Turkish coup), and may also possibly reflect some concern by travellers heading to the upcoming Olympic Games.”
– Mitchell Watson, Head of Research

Search volume for terrorism cover would appear to be related to specific terrorist events; in November last year, as well, Canstar noted a spike in visitors searching for travel insurance that incorporates terrorism cover (43%), which coincided with the November Paris attacks at the Bataclan Theatre and elsewhere.

Chances of a terror attack

The government’s Smarttraveller terrorist Threat Bulletin, issued in late July, stated that there is a continuing and long-standing threat of terrorist attack across the world, with a nine-fold increase in the number of deaths from terrorism since 2000.

“Australia and Australians are viewed by the Islamic State in Iraq and the Levant (ISIL) and other terrorist groups as a target for terrorist attacks. This threat extends worldwide. Even in cases where attacks may not specifically target Australian interests, Australians can, and have been, harmed in indiscriminate attacks or attacks aimed at others.”

Source Smart Traveller

Nevertheless, your individual risk of being directly impacted by a terrorism event is low, with just over 100 Australians having been killed in public terrorist attacks since 2001. According to Smart traveller, Australians have been killed in the following events:

  • the attack in Tunis on the Bardo National Museum on 18 March 2015
  • the attack in Nairobi on Westgate Mall in 2013
  • the attacks in Jakarta on the Marriott and Ritz Carlton Hotels in 2009
  • the attacks in Mumbai on the Taj and Trident Hotels in 2008
  • Bali bombings of 2005
  • the Jakarta Marriott bombing of 2003
  • the Bali nightclub bombings of 2002
  • the World Trade Center attacks in New York in 2001

Does travel insurance cover terrorism?

When it comes to actually covering terrorism-related events, Canstar’s research shows that travellers do need to check the fine print. Of the 281 travel insurance policies rated by Canstar in 2016:

  • 144 cover injury as a direct result of terrorism
  • 101 cover repatriation as a direct result of terrorism
  • 21 cover cancellation costs as a direct result of terrorism

Realistically though you’re much more likely to have to claim on your travel insurance for a stolen wallet, or lost luggage, or medical costs than you are for terrorism.

And travellers should be reassured that generally the Australian government/embassy is going to step in and assist.

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