You may need beefed-up travel insurance to cover you in case of terrorism

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Terrorist attacks — like the deadly bombings at the airport and a subway station in Brussels — cause not only devastation but also major disruptions, shutting down transportation systems and stranding travelers. Acts of terror tend to spark renewed interest in travel insurance. 

“After 9/11, there was a surge of interest in travel insurance,” says Linda Kundell, spokeswoman for the U.S. Travel Insurance Association in New York. “When you have events of this magnitude, people understandably become more interested.”

Most travel insurance plans cover all nonrefundable, prepaid travel expenses for delays or cancellations due to acts of nature. The travel delay portion of a plan can provide $150 to $250 per day for meals and accommodations up to a $1,500 maximum limit, depending on the policy, according to Jim Grace, president of travel insurance comparison site InsureMyTrip.

But terrorism is different.

Man-made events

A standard travel insurance plan typically does not cover cancellation for a man-made event, including acts of terrorism, policyholders whose flight or cruise is delayed or may be covered under the travel-delay provisions of their policy, according to Kundell.

“Now if the destination becomes uninhabitable, that is often a covered peril,” she says

Confused? Let’s break it down. According to the Insurance Information Institute in New York, travel insurance packages typically include coverage for the following: trip cancellation, travel delay, lost or delayed baggage, medical, dental, emergency evacuation, 24-hour traveler assistance and accidental death. Some policies include options for rental car collision and damage coverage.

Some policies also include options for rental-car collision and damage coverage.

The cost of travel insurance

The institute estimates the cost of travel insurance at 5% to 7% of the price of the trip. Thus, a $5,000 Roman holiday would cost roughly $250 to $350 to insure.

You can purchase additional peace of mind with a cancel-for-any-reason — including terrorism — policy. Kundell says the upgrade, which typically adds 30% to the overall cost of a travel insurance policy, “insures against a greater number of incidents, including ‘I don’t feel like going.’ If you’re nervous, this coverage can be a good thing.”

Flight insurance — those inexpensive policies underwritten for the airlines by the same companies that offer travel insurance — insures only the air-travel portion of your trip. Such limited coverage may not fully reimburse you should you have to cancel or postpone a nonrefundable flight due to illness, or if the flight is canceled due to weather, according to the U.S. Travel Insurance Association.

Travel insurance not only protects you should illness strike or your tour operator closes down. Its medical and 24-hour assistance/evacuation coverage can stave off a potentially catastrophic financial blow should you require emergency assistance aboard a cruise ship or in a foreign country.

When to buy

Kundell notes that it’s important to pay close attention to time frames when purchasing travel insurance. Some travel delay coverage kicks in within 4 to 6 hours, while others don’t begin until 24 hours have passed. Similar time frames govern how close to departure you can cancel your trip; 48 hours is common.

“You should buy your policy within 2 weeks of prepaying for your trip because some pre-existing conditions are typically waived if you purchase within that time period,” says Kundell.

How can you tell if you need travel insurance? That depends on your personal and financial situation and the nature of the trip. Is your health likely to force you to cancel or postpone your trip? How much would you pay out of pocket for food and lodging if your flight were delayed, and what is a likelihood of that happening given your destination, seasonal weather, etc.? Are you exploring Bora Bora for the first time or taking a leisurely Alaskan cruise with your parents?

“The rule of thumb would be to ask yourself: What do you stand to lose?” says Kundell. “For some people, $200 is a lot of money. Others can afford to lose $200. It’s a decision each person has to make.”