Q&A: Insurers tackle terror fears

As services slowly return to normal, many people are counting the cost and wondering whether or not they can claim money back from their travel insurers.

Does my insurance cover terrorism?

Unfortunately, not in the majority of cases.

Terrorism is what the industry calls an exclusion, meaning that most policyholders cannot claim for delays, lost hotel bookings, or incurred costs such as food and drinks.

Some policies do offer cover for disruption caused by the threat of terrorism or acts of terrorism, but they are generally more expensive and harder to find than the standard cover offered by most firms.

So I am going to be out of pocket?

Don't panic, you won't necessarily have to write off your hard-earned cash.

Airlines such as British Airways, Easyjet and Ryanair have been doing their best to get people on their way and are offering to rebook and even refund tickets for flights that were cancelled or delayed.

If you organised a holiday through a travel agent or tour operator, you should also be OK.

The main thing to do is get in touch with the companies involved and find out what they are willing to do.

Also, keep your receipts and proof of spending - they probably will be asked for by the insurers in the event that the firms do offer to pay out.

But what if I booked the holiday myself?

This is where things get a bit trickier.

While you should still be able to fly to your destination, you would not be able to claim for any add-ons such as lost hotel bookings or car hire.

A lot will depend on the terms and conditions of your insurance policy and how willing the provider is to try to help out.

Stephen Thorley is managing director of Travellers Protection Services, the company that provides insurance products for companies including budget airline Ryanair, cruise firm P&O and the Telegraph newspaper group.

Mr Thorley recommends calling your insurer directly and discussing your circumstances.

"We are all human," he said. "And we have a sympathetic claims department."

Mr Thorley said that his company had already taken steps to help clients, changing the policy on valuables so that they would be covered when a traveller's entire baggage had to be checked in to a plane's hold.

Travel insurance, what a rip-off!

It may seem that way, but the industry argues that it is doing its best to meet the needs of customers with policies that offer enough cover without breaking the bank.

Offering protection from terrorism "is one area we freely admit that even governments run scared from", Mr Thorley said.

Consumer groups aren't sitting quietly, however, and have pressured the government to look into the possible mis-selling of insurance by travel agents and tour operators.

The problem is that while many of the biggest insurance companies, such as Travellers Protection Services, are regulated by the Financial Services Authority, many of the smaller firms can operate without any supervision.

One area of concern is that many customers don't get given enough information about the policies they are being sold by tour operators and travel agents, causing them to believe they are covered when in fact they aren't.

So how can I make sure I am protected?

The Association of British Insurers recommends that you work out the type of cover you want and what best suits your travel needs - for example, you may find that an annual policy works out cheaper than buying separate insurance before each trip.

Then, when you get a price, shop around in what the ABI describes as a very competitive market.

And finally, make sure you read the terms and conditions carefully. It's not small print, it's the difference between getting proper insurance cover and finding yourself footing the bill instead.

RELATED INTERNET LINKS
Association of British Insurers
The BBC is not responsible for the content of external internet sites