Does travel insurance cover losses caused by the US government shutdown?
That question relates to recent concerns that from travelers regarding upcoming domestic trips to some of the United States’ great national parks and monuments. Because the 2014 budget hasn’t been passed, the National Parks Service has furloughed park staff, and as a result, parks from Maine to Hawaii have been closed to tourist and visitors. Just in one park alone it is estimated that 10,000 visitors will have been effected by the park closure. One story tells of a traveler that has planned a trip into the Grand Canyon for 18 years and who has $16,000 of paid trip costs not being able to begin his journey down the canyon because of the closure. Others are afraid that it might spread to air traffic control and to the TSA.
Can trip insurance help with this type of exposure? The quick answer is no. Trip cancellation and interruption coverage is a named peril coverage. Translating that into plain English, it means that the insurance companies have specific lists of covered reasons in their policies, and only those reasons that are listed are reasons why a traveler can cancel or interrupt a trip and be covered by the insurance company. None of the policies cover losses caused by a government shutdown.
The only option available to a traveler is to find a policy that offers “cancel for any reason coverage.” That coverage is available, however, there are time restrictions concerning when coverage must be purchased, and all plans contain significant co-pays in the event of a claim. In addition, cancellations must occur prior to 48 hours before departure.
So, can travel insurance help alleviate the financial pain caused by the effects of a governmental shutdown on travel? Probably not.