PHOENIX (3TV/CBS 5) – Some Arizona travelers are upset with an insurance company’s decision to deny their claims after their trip to Israel was canceled. The company says the October 7th attack from Hamas was an act of war and not a terror attack – so they’re not paying.
John and Pat Sterner have been saving ten years for a tour of Israel. “We’re both Christians,” John said. “I love the history of Israel. I love the people. I love hearing about that. I mean, 4000 years of history.” The couple booked a tour and were set to leave on October 10th to see some of the holiest cities when they arrived.
But just three days before the trip, Israel came under attack. On October 7th, the terror group Hamas launched coordinated attacks in Israel, killing hundreds of people. “None of us expected that, you know, something horrific as this could happen,” John said. “And it was, it was terrible. It was horrific.”
As a result, the tour was canceled, and flights in and out of Israel were canceled. It meant the Sterners might be out about 58 hundred dollars… but thankfully, they had purchased trip insurance through AIG, one of the biggest names in the insurance business.
More bad news for the couple
According to AIG, the Sterner’s insurance policy covers terrorist attacks. The policy states travelers will be reimbursed in the case of “a terrorist incident in a city listed on the insured’s itinerary within 30 days of the insured’s scheduled arrival.” However, the Sterners’ claim was rejected because AIG disagrees that the attack should be labeled as “terrorist.” They say the attack was an “act of war,” according to their policy, “war or act of war, whether declared or not,” is excluded from refunds.
John says it’s a play on words to get out of paying.
“At the time that this happened, this was a terror incident, just the way they describe it in their policy, and just the way the government describes it,” he said. On Your Side went back and reviewed countless news reports where the United States refers to the attacks as being linked to terror. Just one day after the attack, Secretary of State Antony Blinken told CNN: “This is the worst attack on Israel since the Yom Kippur War in 1973 – 50 years ago. But there’s a big difference. That was a conventional war between countries, between armies. This, a massive terrorist attack on Israeli civilians.”
Despite the federal government labeling this a terrorist attack, AIG denied the Sterners’ appeal.
The Sterners aren’t alone.
Sheri Hathaway and her family were booked on the same trip, spending nearly $12,000, not counting airfare.
Sheri says AIG rejected their claim as well.
“Hamas is a terrorist organization,” she said. “This happened as a terrorist attack on Israel by Hamas and clearly states in their policy that they do cover terrorist incidents, which this clearly was.”
With their claims rejected, Sheri and John both turned to On Your Side.
“Gary Harper gets results,” John said.
We contacted AIG — and the company declined to comment on the record.
However, they told On Your Side they stand by their decision to reject the claims.
Again, AIG’s definition of a terrorist incident states, “the following are not considered terrorist incidents: …an act of war (declared or undeclared.)”
For the families involved, they don’t agree with AIG, but they’re keeping perspective.
“I’m not asking to be felt sorry for, because there are people over there that we should feel sorry for and that I feel sorry for,” John said. “Not me. I’m not hurting. They are.”
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Clinton Mora is a reporter for Trending Insurance News. He has previously worked for the Forbes. As a contributor to Trending Insurance News, Clinton covers emerging a wide range of property and casualty insurance related stories.