Insuring against terrorism: First Take Cover

Insurers are looking more kindly on claims caused by terrorist acts, writes Mark MacKenzie

The meltdown at Heathrow airport caused by the alleged terrorist plot last August led to thousands of stranded travellers desperately calling their insurers to see if their travel policies covered them for such an eventuality. With the root cause of the chaos allegedly terrorist in nature, the answer in the vast majority of cases would have been a resounding no.

Hiccups in your holiday plans that are caused by acts of terrorism are what the travel insurance industry likes to refer to as "an exclusion". Should a terrorist act cause your flight to be delayed or even your holiday to be cancelled, your insurer is not obliged, under the terms of most policies, to reimburse you.

In the UK, the travel insurance market is worth an estimated £600m annually. Yet, despite the vast sums involved, coming up with a product that offers recreational holidaymakers comprehensive cover against terrorist acts is something that is proving elusive.

"The popular view is that insurance premiums and policies are fixed by actuaries sitting in rooms with calculators," explains Stephen Thorley, managing director of Travellers Protection Services, an independent travel insurance retailer that sells products through, among others, Ryanair and P&O. "While this is a rather exaggerated view," says Thorley, "terrorism is, by its nature, wildly unpredictable and that makes it very difficult for us to apply any science to it."

But things are changing. The Association of British Insurers estimates that around 50 per cent of travel insurance providers now offer policies offering some degree of terrorism cover. "Increasingly, more and more insurers are offering terrorism cover for medical expenses," says the ABI's Malcolm Tarling. "No insurer that values their reputation is going to leave you stranded if you get injured in a terrorist attack while on holiday."

Mr Tarling advises consumers to check the various stipulations before purchasing a policy and make sure the level of cover matches your needs. "If you're going skiing in the Alps, [terrorism cover] might not be as important as if you are travelling to, say, Turkey or Jordan," he says. Tarling believes the insurance industry is coming to view terrorism as an everyday risk, adding that the inclusion of terrorism cover no longer means a vastly inflated premium. "In years gone by insurers placed terrorism in the same category as war. The risk of injury was significant and the premiums reflected that. Today, in the event of a large-scale terrorist attack," he says, "the financial implications are likely to be considerable, but the load is being shared by an increasing number of companies."

Where terrorism exclusions do still exist - in claims not of a medical nature - Stephen Thorley believes the industry "needs to be as sympathetic as possible". One way of doing this is to offer additional cover in increments, what Thorley refers to as "working around the edges" of the terrorism debate. Following the alleged terror plot at Heathrow, for example, TPS was one of a number of companies that extended cover for valuables placed in the hold, a clause not usually contained within most policies.

If you do specifically want terrorism insurance and a potential insurer doesn't offer it, Mr Tarling advises consumers to "vote with their feet. Shop around because there are plenty of places where you can buy terrorism cover as standard on the policy."

So might we one day expect to see policies offering a terrorism provision for all aspects of our holiday? "It would need to be an industry-wide move," says Mr Thorley. "While insurers could put £2 or £3 on a premium, for example, this is a sector in which the difference of a pound or two can greatly influence the policies consumers choose."

Have you tried new the Independent Digital Edition apps?
Travel
ebookHow to enjoy the perfect short break in 20 great cities
Independent Travel Videos
Independent Travel Videos
Simon Calder in Amsterdam
Independent Travel Videos
Simon Calder in Giverny
Independent Travel Videos
Simon Calder in St John's
Independent Travel Videos
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Travel

    Ashdown Group: Print Designer - High Wycombe - Permanent £28K

    £25000 - £28000 per annum + 24 days holiday, bonus, etc.: Ashdown Group: Print...

    Recruitment Genius: Business Travel Consultant

    £20000 - £26000 per annum: Recruitment Genius: With offices in London, Manches...

    Recruitment Genius: Customer and Brand Manager

    £30000 per annum: Recruitment Genius: Customer and Brand Manager required for ...

    Ashdown Group: Systems Administrator

    £25000 - £35000 per annum + benefits: Ashdown Group: Systems Administrator A...

    Day In a Page

    Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

    How Isis profits from destruction of antiquities

    Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
    Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

    'If we lose touch we’ll end up with two decades of the Tories'

    In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
    Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

    The Arab Spring reversed

    Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
    King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

    Academic claims King Arthur was real - and reveals where he lived

    Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
    Who is Oliver Bonas and how has he captured middle-class hearts?

    Who is Oliver Bonas?

    It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
    Earth has 'lost more than half its trees' since humans first started cutting them down

    Axe-wielding Man fells half the world’s trees – leaving us just 422 each

    However, the number of trees may be eight times higher than previously thought
    60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

    60 years of Scalextric

    Model cars are now stuffed with as much tech as real ones
    Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

    Why are we addicted to theme parks?

    Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
    Tourism in Iran: The country will soon be opening up again after years of isolation

    Iran is opening up again to tourists

    After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
    10 best PS4 games

    10 best PS4 games

    Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
    Transfer window: Ten things we learnt

    Ten things we learnt from the transfer window

    Record-breaking spending shows FFP restraint no longer applies
    Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

    ‘Can we really just turn away?’

    Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
    Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

    Nine of Syria and Iraq's 10 world heritage sites are in danger...

    ... and not just because of Isis vandalism
    Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

    Girl on a Plane

    An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
    Why Frederick Forsyth's spying days could spell disaster for today's journalists

    Why Frederick Forsyth's spying days could spell disaster for today's journalists

    The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent