You’ve booked a trip from Canada to Istanbul or the south of France. But you’re worried about terrorism and want to cancel.
You can always cancel a flight, of course, but you might have to pay a steep penalty and may not get any or very little of your money back. Experts say most travel insurance policies will cover you if you’re heading out to a trouble spot where terrorism has just happened or is on high alert. But most policies won’t cover you if your trip is months out or if you’re flying to an area where you simply are afraid of problems.
“Being afraid doesn’t count,” said Alex Bittner, president of the Travel Health Insurance Association of Canada. “But some companies make exceptions. You might even say the tie base goes to the traveller. It’s a grey area but insurance companies are sensitive to these things. With things like the Zika virus you have to use common sense with pregnant women, for example. Insurers are historically very fair about reimbursing people.”
There are solutions. Some insurance companies offer a “cancel for any reason” policy that will cover most but probably not all your expenses. It might cost you double what an ordinary policy costs (sometimes 10% of the cost of a trip versus a more standard 5%). But many companies do offer them.
Phil Sylvester at Australia-based World Nomads says his company sells policies around the world, including in Canada. They don’t offer a “cancel for any reason” policy because of the “astronomical” expense. But he said their rates are based on a complex formula and not based solely on the cost of a trip.
“We limit our potential losses by putting some limits on some benefits, so we’re able to keep the premium reasonable,” he said.
Insurance companies in Canada use global advisories put out by the Canadian government as their guide. If a country or area has a level three or four advisory (meaning the government says avoid all travel or avoid all non-essential travel), you’re likely covered. Level one or two warnings (which suggest travellers use normal or high degrees of caution) don’t matter.
Bittner said airlines and hotels more sensitive to such things now than in the past. Airlines that fly to trouble spots often allow customers to re-book tickets for a later date or use the value of their ticket to fly to a different destination.
Some credit cards offer protection if they’re used to book a trip that’s disrupted by terror incidents, but for credit cards and travel insurance in general, it’s always critical to read the fine print.