The Insurance Council of Australia has warned travel insurance generally excludes cover for losses arising from armed conflicts, given safety risks to people and potential financial impacts on insurers.

Thousands of travellers have been left stranded after military strikes in the Middle East caused the Dubai and Abu Dhabi airports in the United Arab Emirates and the Doha airport in Qatar to close.

The federal government has issued “do not travel” warnings for both countries.

ICA says covering conflict zones without restriction could inadvertently encourage travellers to take risks they would otherwise avoid, putting lives in danger, while insurance works by spreading risk across a large pool of policyholders.  

“Armed conflicts can trigger mass evacuations, infrastructure collapse and widespread disruption affecting thousands of travellers at once, placing unsustainable pressure on the pool and ultimately compromising the cover available to all policyholders,” it said.

ICA says travel insurance policies generally exclude loss or injury arising from war, armed conflict or civil unrest.  

The Department of Foreign Affairs and Trade almost always issues a “do not travel” warning for destinations during conflicts, and those advisories are also a key trigger for policy exclusions. 

ICA CEO Andrew Hall says travel insurers have received hundreds of calls yesterday and today. The Middle East is a key travel corridor for Australians traveling to Europe in particular, but also to Africa and other parts of the world.

“While this is not at the same level that we experienced during covid, it is a very significant disruption, and it’s a little bit more serious, because obviously there is some lethal war activity occurring over in the Middle East, and so for those reasons alone, people’s safety is the number one priority,” he told media.

Mr Hall flagged that there are some providers of "change your mind for any reason" policies and customers should check with their insurer on coverage.

However, Go Insurance CEO Mark Fuller told insuranceNEWS.com.au that its "cancel for your reason" product would not respond to those impacted by cancelled flights to areas directly affected by the conflict. He says for the coverage to kick in the customer has to have been able to travel. 

"We have had a flood of inquiries this morning," he said.

"Cancel for your reason is giving coverage for a disinclination to travel – it is not designed to carry the massive global risk of war."