Policies will not cover terrorist acts

By ALAN PERROTT

Most travellers caught out by the Bali bombings will be left severely out of pocket - their travel insurance became worthless the moment the terrorists struck.

Sue and George Stevenson of Kaitaia had travel insurance but it did not cover acts of terror. They are unsure how much they will have to pay to cover their shortened holiday and return flight, but had heard other survivors talking about $1600.

Lee Panther, who was injured in the blast, bought travel insurance at a Warehouse store.

Her boyfriend, Wayne Grbic, said they were unsure whether she would be covered, but a spokesman for NZI, which provides the Warehouse policies, said claims related to terrorist acts were excluded.

Before September 11 last year, few insurance policies mentioned terrorism - most talked of "all risks" cover or "acts of war".

The golden days ended with the strikes on the United States, when the world's insurance industry woke up to a cleanup bill of more than US$50 billion ($103.8 billion).

The result was higher premiums and policies that lapsed in the event of terrorist strikes.

Consumers' Institute chief executive David Russell said travellers should check the fine print thoroughly before taking up a policy.

Travel insurance should cover trip cancellation, interruption, accidental death or injury, loss of baggage or personal effects, and the possibility of your hotel or event organiser going bankrupt or defaulting on an agreement.

The small print will explain when this cover ends. For example, can you lodge a claim if you have to return home because your mother is ill?

Some insurance is voided if you are less than halfway through your planned holiday.

A terrorist incident usually ends any chance of a successful claim - if you are thinking of cancelling a holiday because of the Bali attack you probably will not get a refund.

If you have a holiday booked and Foreign Affairs unexpectedly places a travel advisory on your destination, contact your travel agent and ask if you are still covered if you go.

Some companies will cover you, if you are willing to pay enough, but most will not.

On the positive side, travel agencies say that since September 11 they are getting better at putting together alternative packages.

Check when your cover begins and ends and the provisions for medical evacuation - some insurers will bring you home, others will take you to the nearest medical facility.

Find out what insurance cover you already have.

The cost of insurance varies widely and you may not actually need it, as some house and contents policies include limited cover for losses away from home, and medical and vehicle insurance can also have limited coverage when you are away.

But despite these hassles, if you are heading overseas, it is safer to go with travel insurance.

Australia's Insurance Disaster Response Organisation is co-ordinating efforts to help those caught up in Bali.

It has found that many Australians there did not have insurance.

Steve Nichols, travel insurance director for Mike Henry (NZ), says New Zealanders also have a false sense of security when travelling around the South Pacific, and about 40 per cent decide against buying insurance.

David Wafer, chief executive of Holiday Shoppe and United Travel, suspects many opt out of travel insurance because of the increasing number of policy exclusions.

He said travel companies were becoming concerned that premiums kept rising while policies steadily covered less.

Bali messages and latest information on New Zealanders
New Zealand travellers in Bali, and their families around the world, can exchange news via our Bali Messages page. The page also contains lists of New Zealanders in Bali and their condition.

Foreign Affairs advice to New Zealanders

* Travellers should defer travel to Bali

* NZers in Bali should keep a low profile and remain calm

* Foreign Affairs Hotline: 0800 432 111

Feature: Bali bomb blast

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