No claims, please, if you're stranded

It may not seem the best time to be going on holiday, but it will cost you to cancel

The terrorist attacks in America and the threat of war have left many people who are due to go on holiday in the next few weeks concerned about whether it is safe to travel. Unfortunately, the news at the moment is not good for those wanting to cancel or postpone.

Prior to 11 September, few people would have checked the small print on their travel insurance to see if they were covered for hijackings or for acts of terrorism or war. However, as some of those stranded in New York discovered to their cost, these are generally industry-wide exclusions. While airlines ensured that people got home safely, a lot of passengers had to foot the bill for an extra week's stay in the US. Only four insurers – Columbus, Direct Line, Direct Travel and Norwich Union – waived the terrorism exclusion clause to help policyholders meet the costs. Some others have made ex gratia payments but these have been on a case-by-case basis.

The insurance companies argue that they can't cover everyone for everything but that they are, and will be, sympathetic and look at cases individually. However, this is of little comfort to those who were stranded after the events of 11 September, or who may be due to go away in the next few weeks.

For now, insurance companies, tour operators and airlines are closely monitoring the international situation. Because of the current threat of war, the Foreign Office is advising people not to travel to Afghanistan, Pakistan, Iraq and Tajikistan. It remains to be seen if other countries will be added to this list.

"It's so difficult at the moment because everything's on a day-by-day, hour-by-hour basis," says Helen Dwyer, director of insurer Primary Direct. "Everyone's just sitting and waiting [to see if the Foreign Office changes its advice]."

What this means is that, even if you are concerned about your holiday plans, you will not be covered by your travel insurance if you cancel. And your tour operator or airline is under no obligation to let you travel at a later date or refund your money, because the Foreign Office still says it is safe to travel. A spokesman for the Association of British Travel Agents (Abta) says this will remain the case "until the Foreign Office says otherwise".

"It is industry standard for 'disinclination to travel' not to be covered [under the terms of travel insurance policies]," says Kim Sullivan, a spokeswoman for Direct Travel.

Polices vary in what they do and do not cover, but typical scenarios in which you will be covered for cancellation include serious illness, the death of a close relative, being called for jury service and being made redundant. If you want to cancel your trip for any other reason, you will usually have to meet the cost of the cancellation fee yourself. Despite this, some insurers are now refunding insurance premiums if you cancel your trip because of the current international situation. Alternatively, they will change the dates of cover free of charge if you've rearranged your travel plans.

If you do go away and war breaks out while you are abroad, your airline or tour operator will ensure that you get home.

"Your tour operator has a duty to look after you," says a spokesman for travel agent Thomas Cook. "It would make sure you got home safely."

If you aren't on a package holiday and therefore don't have a tour operator, the airline should help. If it doesn't, it is worth contacting your insurer, but be aware that there is no guarantee you will receive any money from it. The war and terrorism exclusion clause means that, as was the case in New York, ex gratia payments may be made but these will depend on individual circumstances and will be totally discretionary.

"The current events are quite fast moving and unusual, so we are trying to work out the actual extent of cover we could offer in this scenario," says Kathryn Pugh, a spokeswoman for Eagle Star.

Despite holiday-makers' understandable concerns about travelling, the insurance and travel industries are keen to point out that, for the time being at least, it is still perceived to be safe to go to most parts of the world.

"The war exclusion clause doesn't apply at the moment because war hasn't been declared," emphasises Liz Nicholson, a spokeswoman for Norwich Union. "We are dealing with a hypothetical situation so it's difficult to know what will happen if things change."

Anyone planning to go away over the next few weeks and concerned about travelling can check the Foreign Office website for up-to-date information. Many insurance companies have also set up special helplines, though it is probably better to speak to your travel agent, airline or tour operator first as they will be able to inform you of any changes to travel arrangements, as well as providing advice.

Contact: Foreign Office, www.fco.gov.uk or 020 7008 0232/3.