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DISPATCHES: Terror & Travel Insurance

Plane While the new airline security measures are being assessed and adjusted, another safety net is coming under scrutiny: travel insurance.

(Courtesy: American Airlines)

If you had been stuck at Heathrow Airport during last week’s lengthy delays and missed your flight — or it was cancelled, as many flights were — would a travel insurance policy have helped?

That all depends. If your policy treated the delays and cancellations as the carrier’s responsibility  — in fact, they were the result of decision by the BAA (British Airport Authority) and the airlines in the UK — it would have come under the heading of "carrier delay." In that case, the insurer would have taken care of you under the travel delay benefits clause of your policy. That typically includes paying for a hotel room, meals and other "reasonable" expenses until it was possible for you to travel. And since many policies have a 24-hour contact number or website, they could have helped you rebook your flight or rerouted you.

But there’s little chance that your trip would have been covered by the trip cancellation or trip interruption part of your coverage. The reason: the delays and cancellations were precautionary, and not undertaken as a result of an act of violence or loss of life. So if you planned a trip to London in the days following the events of August 10 and decided to cancel a trip because you were scared, you would not be covered. And if you’d been traveling abroad and decided to return early because the safety of home seemed like a far better alternative, you would not have been covered either.

Travel insurance is still a good idea for big ticket trips. Just don’t expect it to bail you out in every situation.

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