Understanding Travel Insurance after a Pandemic

by Float Team

The pandemic has changed the way many people view travel insurance and whether it is worth purchasing for future travel. While travel plans all over the world have had to be canceled due to coronavirus, the majority of travelers are still expecting to take their planned vacations at a later date. Whether you are a solo traveler, business traveler, backpacker, or sportsperson, emergencies can happen at any time. It’s important to understand how travel insurance will look in the future and how it may protect you against financial losses in the case of unexpected future pandemics and medical emergencies while you are traveling overseas. 

What is covered in your policy?

Travel insurance companies will differ greatly in what they provide as well as the price they are offering, so do your research and if you don’t understand what you are paying for or what is included, make sure you ask. Mark Friedlander, a spokesperson for the Insurance Information Institute states that “There’s a clause in many policies that says you won’t get trip cancelation coverage for illness once it’s declared an epidemic or pandemic”. The reason why they can do this is that it has been declared a ‘foreseen’ event that has a reasonable expectation of taking place. Rachel Coen, a spokeswoman for G1G Travel emphasizes that “if travelers need to travel at the moment, it’s best to reach out to travel insurance providers directly to ensure their coverage needs are met.” 

How has coronavirus changed future travel insurance policies?

For years, travel insurance companies have hidden exclusions in the fine print of their policies but now, they are being upfront with clearer messaging on what is and isn’t included in a policy. Allianz Travel Insurance currently states “Our travel protection plans generally do not cover losses related to COVID-19. Given the rapid rise in travel bans, please ensure that no travel ban is in place during your dates of travel before purchasing a travel protection plan.” New policies may also come with more limitations with U.S travel insurance companies restricting medical benefits when visiting international destinations with government-issued travel advisories. 

Does my travel insurance cover previous canceled trips due to coronavirus?

John W. Cook, founder of Travel Insurance Ratings & Reviews states that “Insurance is going to protect you for something that has happened to you. Not if something may happen to you.” Cancelation due to concern about being exposed to coronavirus is not a covered reason in any travel insurance policies. However, you would be reimbursed if you were quarantined during your travel or became ill before your trip. If your trip was canceled by an airline, cruise ship, or other providers, you should get a direct credit or refund from them which does not require travel insurance. Travelers who want the option of getting at least some money back if they cancel a trip due to health reasons should look for policies that include ‘cancel for any reason’ coverage. 

What is ‘cancel for any reason’ coverage?

“Cancel for any reason” coverage is an additional add-on to a travel insurance policy that often costs travelers 40% more than standard policies. “Cancel for any reason” is not currently available in every U.S state but this may change because of the result of the pandemic. Choosing this add-on with a standard policy will allow travelers to be reimbursed between 50%-75% of your prepaid, forfeited, and non-refundable trip costs. However, this coverage doesn’t come without restrictions. Check the fine print on how many days you can cancel before you leave and typically you will need to select this coverage when you initially purchase your policy rather than adding it on later. 

What to look for in travel insurance after the pandemic?

All travel insurance comes with a ‘free look’ period between 10-14 days after you buy the policy. If your trip has been postponed to a later date because of coronavirus then your travel insurance should cover you to reflect the new dates. Few travel insurance policies are addressing how to deal with a future pandemic or quarantine but Nate Hake, a former lawyer who travels frequently believes it is likely that travel insurance policies will find a way to come up with quarantine insurance-type products that are affordable.

The main benefit of travel insurance is for unexpected medical emergencies and related expenses, and other unforeseen losses while traveling outside of your home country. Always read the fine print of your travel insurance  policy before you buy, report any losses  to your insurer as soon as you can, and where appropriate ask for a police or airline report for proof of loss. Finding the right travel insurance can require a lot of time and in some cases money but it’s worth it so you can travel with protection and without the stress of any financial losses should an emergency or future pandemic occur.