Most travel insurance comprehensive plans include, in their coverage for trip cancellation and interruption, some mention of coverage for terrorist acts. With this coverage, you would theoretically be able to cancel or interrupt your travel plans if an act of terrorism occurred in your destination city within a certain number of days of your scheduled arrival (this time frame varies by plan and provider, but in general, can be anywhere from 7 to 30 days).
The Definition of "Terrorism"
While the definition may vary depending on which plan and provider you've chosen, there are two basic ways that travel insurance companies define "terrorist acts." One is to stipulate that the United States government must declare the situation in question to have been an act of terrorism.
The other makes a clear distinction between terrorism and "civil disorder or riot," and also usually stipulates that the incident must not have been an act of war, whether declared or undeclared. In any case, travelers should understand that even if there is some kind of violent, frightening civil discord occurring in a country to which they are scheduled to travel, it may not be covered under their travel insurance policy's definition of "terrorism."
Time and Place Restrictions
In order to be eligible for coverage against terrorist acts, you will likely have to meet some expectations on the part of the travel insurance company as far as dates and geography are concerned. For example, your travel insurance policy will likely state that coverage only extends to terrorist acts that have occurred within a certain number of days of your scheduled departure, so make sure to read your plan details carefully.
Also, if a terrorist act has occurred in your destination city prior to your purchase of a travel insurance policy, it will likely be considered a "known peril" – which would mean that you would not be eligible for coverage if you chose to cancel your trip as a result of that terrorist incident. Lastly, depending upon the plan you've purchased, you'll need to be familiar with whether the coverage applies only to a city that is specifically on your itinerary, or whether it also extends to outlying regions or to the country as a whole.