Australia's decision to raise Saudi Arabia to "Do not travel" has put fresh attention on travel insurance. For many policies, though, the key date was three months ago.
Smartraveller updated its advice on October 19, raising the overall level to "Do not travel" because of the volatile security situation. It told Australians to postpone planned travel, including travel for religious purposes, and to exercise extreme caution travelling to and from all airports in the country. Under the advice, "do not travel" also means "do not transit". Smartraveller warns that travel insurance may not cover travellers who go, and that consular assistance may be limited.
The insurance exposure, however, began earlier. When Smartraveller raised Saudi Arabia, Jordan and Oman to Level 3 on July 21, known-event exclusions applied to travel insurance policies purchased from that date. The Level 4 upgrade tightens the position further. IB has reported that most standard policies will not cover travel to "Do not travel" destinations.
The policy language is direct. Allianz's travel insurance PDS states that coverage "may be affected or declined where a claim arises because you did not follow an advice or warning issued by an Australian government relating to your destination". It specifies that this includes travelling when a "Reconsider your need to travel" or "Do not travel" alert is in place.
The risk extends to business travel. Saudi Arabia is a significant trading partner, with two-way goods and services trade of $2.07 billion in 2023–24. Smartraveller notes that on October 13, the Houthis threatened to attack Aramco's headquarters in Dammam and its refinery in Riyadh.
For travellers already in the country, Smartraveller now advises considering private car, train or bus options instead of air travel, including to aviation hubs in the United Arab Emirates and Qatar. It advises not to leave for any Saudi airport until a flight has been reconfirmed.
For brokers with corporate or individual clients on Saudi itineraries, the claim turns on dates and wording. The first check is when the policy was bought, before or after July 21 and October 19. The second is how the government-advice exclusion is worded. For staff still in the kingdom, the third is what the policy pays if they leave by road rather than air.
