Insurer says no to Bali terror cover

The country's leading travel insurer for tourists, Mike Henry Travel Insurance, has scrapped its terrorism coverage for Bali.

National sales manager Ron New said the decision would be reviewed if official government travel advisories from New Zealand, Australia and the United States eased their predictions of more terrorist attacks on the resort island.

The change affects all coverage for Indonesia, and will deliver another blow to Bali's tourism industry.

Travellers will still be covered for general risks, such as burglaries or accidents.

The decision by Mike Henry comes amid concern some travel agents carried on selling holiday packages to Bali without telling clients the Ministry of Foreign Affairs and Trade had in June advised of a serious risk of a terrorist attack there.

The official advisory said there were indications terrorists might be in the "advanced stages" of planning an attack in Indonesia, including Bali.

And Aucklander Joss Watson was sold holiday insurance for Bali without being told the fine print said the existence of the advisory meant he would not be covered if there was a terrorist strike.

He complained and was given a refund, and took out insurance cover which did not include the exclusion.

Twenty-two people were killed and more than 100 were injured when three bombs exploded on the island last Saturday night.

Caretaker Foreign Affairs Minister Phil Goff was highly critical of anyone selling insurance for a destination it knew was at high risk so the policy would not apply.

He said an insurance seller - either a broker or the travel agent - could have a legal obligation to fully disclose the policy's details and exclusions, especially if it knew about warnings of terrorist threats.

"Your business would be history if you were exposed in not acting in the best interests of the client."

Consumer Institute chief executive David Russell said if someone sold insurance knowing it had exclusions which were not mentioned and which nullified the cover, they could be in breach of the Consumer Guarantees Act.

Insurance Council chief executive Chris Ryan said his organisation would prefer people were told if a policy excluded coverage because of the government advisory.

Mr New said Mike Henry policies did not specifically refer to government warnings.

After the Bali bombings in 2002 the company had decided to include some coverage for terrorist attacks, including medical repatriations.

But the decision was taken on Sunday to exclude all Indonesia, including Bali, because of the seriousness of the terrorist threat there, and the ongoing risks outlined in the advisories.

Mike Henry Travel Insurance is sold to about 65 per cent of New Zealand's leisure travellers.

On Offer

The old
Mike Henry Travel Insurance included some coverage for terrorist attacks, including medical repatriations.

The new
It has scrapped terrorist cover for all of Indonesia, including Bali, because of the seriousness of the threat. Travellers remain covered for other risks, such as theft.