Insuring a Trip In Uncertain Times

Recent terrorist attacks may have you feeling anxious about taking a trip you’ve been dreaming of for years. While you can’t change world events, travel insurance can help you navigate a quick change in travel plans and protect your pocketbook if an emergency arises.

Consumer interest in these safety nets spiked after the Brussels terrorist attacks on March 22. InsureMyTrip.com says its agents fielded a 15% jump in calls from travelers seeking insurance the day after the attacks. But before you buy a policy, it’s critical to understand the fine print.

Most policies will cover travel losses that result from terrorism in a city on your itinerary, says Jim Grace, chief executive officer of InsureMyTrip.com. For the coverage to kick in, a terrorist incident would have to take place within 30 days prior to your arrival date in that city. And depending on the policy you buy, if an attack occurs while you are traveling, the insurance may cover costs for you to get home or pay expenses incurred from travel delays.

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Some policies may require the U.S. government to have declared an incident as an act of terrorism to trigger coverage, says Jason Cochran, editor in chief of Frommers.com. Other policies might require that the State Department issue a warning.

What if you are planning an upcoming trip that includes Brussels? It is possible to get coverage, experts say, but it could depend on when you buy. “The clock starts ticking once an event occurs,” says Daniel Durazo, director of communications for travel insurer Allianz Global Assistance. “It has to be 30 days after the initial event before the next event is covered.” After April 22, you could buy a policy that covers Brussels, he says. Some plans blackout coverage for 90 days after an event.

Standard policies offer coverage for trip cancellation, which allows you to change your plans before you travel, and trip interruption, which comes in handy when you need to change your plans mid journey. For trip losses to be covered, canceling or interrupting a trip must be the result of a qualifying event, such as a natural disaster or terrorism. What counts as a qualifying event can vary by policy. A standard policy costs about 4% to 8% of the total trip costs you want to insure.

A Policy With Flexibility

But standard policies don’t cover fear. “You can’t receive a payout just because you’re afraid to fly,” says Cochran. Nor would a standard policy pay out because you are worried about terrorism.

For maximum flexibility, buy “cancel for any reason” coverage. This insurance “allows you to make the call on whether you take the trip,” says Grace. Travelers have recently been using the coverage for upcoming trips to South America, Grace says, because of the threat of the Zika virus.

Although the reasons for canceling are unlimited, “cancel for any reason” coverage comes with caveats. Generally, you must cancel no later than 72 hours before your departure. And only a portion of your trip costs will be reimbursed, typically 75%. “The consumer has some skin in the game,” says Durazo. A standard policy with a trip interruption benefit could pay up to 150% of the costs to get home, he says. (An interrupted trip may result in a costly last-minute flight home, for instance, so that benefit can result in a higher payout.)

And maximum flexibility has a higher price tag. “Cancel for any reason” coverage generally costs 8% to 12% of the trip costs that you insure, Grace says. To insure trip costs of $4,000, the standard policy premium could be as little as $160, while “cancel for any reason” insurance could cost at least $320. Carefully weigh the extra cost. “Regular travel insurance does cover a lot—terrorism, weather, if you get sick,” Grace says.

Comparison shop using an online marketplace for travel insurance, such as InsureMyTrip.com, SquareMouth.com and QuoteWright.com. These sites offer search filters that can easily help you find policies with the features you want.