Insurance: Some travel policies exclude civil unrest

The official travel alerts for Thailand give confusing advice regarding travel insurance. We unstitch the details and show where you may be exposed if you are travelling to the region.

By John Grant

If you were intending to travel to Thailand then the recent civil unrest and the travel warnings issued by our Government will have you pondering what to do. The warning issued by the New Zealand Government says;

There is high risk to your security in Thailand due to the uncertain political situation, civil unrest and threat from terrorism and we advise against all tourist and other non-essential travel. New Zealanders currently in Thailand with concerns for their safety are advised to consider departing. Suvarnabhumi International Airport on the outskirts of Bangkok is operating normally.  ...  New Zealanders travelling or living in Thailand should have comprehensive medical and travel insurance policies in place. New Zealanders travelling or living in Thailand are strongly encouraged to register their details with the Ministry of Foreign Affairs and Trade.

The full official advisory is available here.

So you have the Government saying it's probably not a good idea to go there and if you do make sure you have comprehensive travel insurance. The irony of this is that most travel policies have exclusions for civil unrest so if you do travel then there is every likelihood that you will not have any cover. Most policies contain a clause that reads along the following lines (Mike Henry Leisure Policy) ;

Riot or civil commotion – unless You have left New Zealand or You have paid for Your travel and accommodation and in both cases Your Policy was in force before the Event.

However the Southern Cross policy has a slightly different clause which states;

Riot or civil commotion unless You have already left New Zealand prior to the riot or civil commotion, the event is Unexpected and You promptly take steps to avoid related risks.

We asked Southern Cross Travel for further details and they advised the following;

For customers who have already departed New Zealand prior to the travel warning on 23 April 2010: If you purchased Southern Cross “TravelCare” travel insurance and departed New Zealand prior to the travel warning being issued on the 23rd April 2010, then there is provision to claim for reasonable unexpected additional expenses, such as date change of flights, additional accommodation, phone calls etc incurred as a result of the current political situation in Thailand - under Section 2, Cancellation & Changes to your Planned Journey. In the first instance, we recommend a traveller contacts their Travel Agent or airline to arrange any changes to their journey, and applies for any available refunds they are entitled to. We recommend that they keep receipts for anything extra that they have had to pay for and submit the claim upon returning to New Zealand. An excess of $75 will be deducted if the claim is accepted.

Southern Cross have indicated that if you have not yet left New Zealand and decide to cancel the trip then there will be no cover under their policy for any cancellation charges or other related expenses. It seems that this is the case of  'fine print' and company interpretations. Under the policy however a claim can only be declined where what you are claiming for relates directly to the exclusion in the policy. This means that if you do decide to travel and suffer a loss that has no connection to the civil unrest then you should be able to claim. This can sometimes be a little murky however as events like lost luggage or higher than normal medical bills may have some tie back to the civil unrest and therefore be excluded. If in doubt then check with the company and keep a close eye out on the warnings issued on the Government travel site www.safetravel.govt.nz. The next potential hot spot maybe Greece and again you need to keep an eye on the safetravel website in case the current advisory is upgraded to a warning.