Travel insurance carriers will often answer coverage questions in their agent newsletters. The recent earthquake and tsunami in Japan has prompted many travelers to ask how this is covered by travel insurance. The following is from iTravelInsured’s newsletter answering some common questions about this situation.
Ask the Insurance Experts:
´Is the earthquake that occurred in Japan on March 11, 2011 at 2:47 p.m. a covered reason under the trip cancellation or trip interruption benefit?
If an iTI travel insurance plan containing trip cancellation/interruption benefits was purchased prior to March 11, 2011, then coverage for trip cancellation or interruption due to the Japanese earthquake is available. The peril listed under the trip cancellation/interruption coverage states, ´. . .natural disaster or bad weather that causes a complete cessation of services for 24 hours or more.´
“Is an aftershock considered a new earthquake or is it an extension of a previous one?”
An aftershock is a smaller earthquake that occurs after a previous large earthquake, in the same area of the main shock. Aftershocks are formed as the crust around the displaced fault plane adjusts to the effects of the main shock. Most aftershocks are located over the full area of fault rupture and either occurs along the fault plane itself or along other faults affected by the strain associated with the main shock. Typically, aftershocks are found up to a distance equal to the rupture length away from the fault plane.
Since the proximate cause of an aftershock is the main shock/earthquake, an aftershock is not considered a new event, but rather an extension of the original main shock/earthquake. Aftershocks have been known to occur months or even years after the original main shock.
This information is applicable to many situations, not just the recent events in Japan.
The first question correctly identifies that in order for trip cancellation and trip interruption coverage to apply, one of the ‘covered reasons’ listed in the policy must happen. Look for policy language pertaining to natural disasters to learn how a policy would cover an earthquake or tsunami.
The second question emphasizes a very important concept with travel insurance. That is, an foreseeable event cannot be covered by a new policy. This means if something is reasonably expected to interfere with the trip at the time the policy is purchased, it will not be covered by the policy. The most frequent application of this principle is with hurricanes. Once a storm is named, it is too late to purchase a policy to cover that storm. Check our insurance provider position statements on the earthquake and tsunami in Japan blog post to see what each company covers and when the event was considered foreseeable.
Always refer to the certificate of insurance for details.