Travel Terror? Don't Count on Insurance

Aug. 28, 2006 — -- The airport chaos, the canceled and delayed flights, and the lost baggage that surrounded the recent terror alert in Britain disrupted the plans of thousands of American travelers in the United States and abroad.

That served as a reminder that travel insurance could help ease the pain -- but not in every case.

In fact, consumers should be aware that where the word "terrorism" is concerned, travel insurance is often about what is not covered.

Since Sept. 11, 2001, a growing number of Americans have purchased travel insurance from dozens of companies, in the hope of recovering the cost of delayed or canceled trips in the new reality of air travel over the last five years.

What's covered?

"Well, that's a good issue," travel consultant Terry Trippler said.

"People have to be very careful about this insurance," he said. "It's so easy to just purchase it and think you are covered, and then find out about the exceptions."

The theory of travel insurance is that it will pay you what the airlines or others won't reimburse.

Most policies exclude terrorism. Those that include terrorism often have restrictions.

Some will reimburse you for canceled travel only if a specific city on your itinerary is hit by a terrorist attack within a month of your planned departure.

The attack could occur in the same country, but if it doesn't happen in the same city, consumers are out of luck.

Take the 2004 train bombings in Madrid, Spain. If you were traveling to Barcelona, you might not have been covered.

Worry simply isn't protected.