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Coronavirus & Travel Insurance: What You Need to Know

by Kacie Goff on 2020-03-31 8:20am

 

As the global spread of coronavirus has turned most peoples’ plans for the coming months on their heads, many of us are canceling trips. Whether you’re postponing your travel plans because you’ve been exposed and need to self-quarantine, to respect stay-at-home orders, or because you’re worried about getting sick as you travel, you might be planning to rely on a travel insurance policy to recoup your costs. Not so fast. All too many travelers are finding that travel insurance doesn’t necessarily cover trip cancellations as a result of coronavirus. 

How travel insurance companies view coronavirus

As of the start of this year, most travel insurance companies are classifying the coronavirus pandemic as a foreseen event. And if you read the fine print on your policy, you’ll see that you’re not covered for cancellations in the event of such a foreseen event. 

In other words, if you don’t already have travel insurance but you want to purchase it now, don’t expect plan changes as a result of the pandemic to be insured. 

If you purchased your travel insurance policy back in 2019, you might be covered. But it depends on the reason you’re canceling your trip. 

How travel insurance works if you’re worried about getting or spreading coronavirus

While state and federal officials are urging us all to stay safely at home, your willingness to follow those orders isn’t enough to kick your travel insurance policy into action. Many travel insurance companies have added content to their websites explaining that canceling your trip for fear of getting sick isn’t covered by your travel insurance policy. 

For example, Allianz has a big, red banner on their home page stating, “Our travel protection plans generally do not cover losses related to COVID-19.” Similarly, AIG says, “Trip cancellation for concern or fear of travel associated with sickness, epidemic, or pandemic, including Coronavirus, is not covered.”

Yes, canceling or postponing your trip is absolutely the right choice to protect your health and prevent the spread of coronavirus. Just don’t expect your travel insurance policy to pitch in for any money you lose. 

How travel insurance works if you have COVID-19

If you’ve contracted COVID-19, there may actually be a silver lining for you here. While trip cancelations for fear of getting sick aren’t covered, cancelations because you’re already sick are. If you get diagnosed with COVID-19 before your trip or you get it while traveling, the policy you have in place can help with the cost to change your plans. And if you’re already on the road, your travel insurance may be able to help cover the cost of medical care, too. 

When you file your claim with your travel insurance company, you’ll need actual documentation from a doctor. Self-diagnosing your COVID-19 isn’t enough. 

Travel insurance that does defend against coronavirus-related plan changes

If you want a policy that will protect you in situations like these, choose “Cancel For Any Reason” (CFAR) coverage. As the name implies, these policies let you cancel your trip for — you guessed it — any reason. They won’t refund your full costs, though. Most CFAR policies only cover 50-75% of your trip costs. Still, in economically uncertain times like these, some reimbursement can be a game-changer. 

Hope for travelers

Unfortunately, most travel insurance companies aren’t paying out as a result of coronavirus-related plan changes. Fortunately, that could change. A House Oversight committee has been working with travel insurance companies to expand their coverage. 

Additionally, many hotels and airlines are offering travel credits if you do need to change your plans. While this isn’t as good as getting money back in your pocket right now, it does prevent you from losing the money outright. When all of this blows over, your travel credits will be ready and waiting so you can take a much-needed vacation.