The increasing threat of a terrorist attack whilst travelling abroad is becoming a major factor when considering which travel insurance policy to buy.



Before purchasing your travel insurance, you should always check the various policy conditions, to make sure that the level of cover matches your needs. If you're going skiing in Japan, terrorism might not be as important as if you're travelling to Bali, for example.



The insurance industry is coming to view terrorism as an everyday risk, and the inclusion of terrorism cover no longer means a vastly inflated premium. However, different insurers take different approaches, which is why it is important that you double check the small print.



Also crucial is that you check the Australian Department of Foreign Affairs and Trade (DFAT) website at www.smartraveller.gov.au. If you travel to a place where the DFAT advice is "do not travel", then the chances are that you will not be covered by any travel insurance policy. It is therefore a risk that you'll have to take at your own expense.



On the other hand, most insurers will provide cover if the DFAT advice is within any of the lower categories such as "reconsider your need to travel". Do watch out though, as some insurance companies will reduce the amount that they are prepared to pay in the event of a terrorist claim under the medical expenses section, so look into this carefully.



One benefit which is rarely featured but can be of great value to the consumer is cancellation protection if DFAT change their advice to "do not travel" AFTER you have made your travel arrangements and paid for your travel insurance. There won't be any cover for terrorism in place if you travel, so this allows you to cancel and obtain a refund of your travel and accommodation costs.