Travel Insurance with COVID-19: Here's What You Should Know

Booking your much-awaited travel plan always comes with a rider of uncertainty. What if something goes awry? What happens if you have to delay, cancel, or some medical emergency befalls while on the trip?

In light of COVID-19, this uncertainty has become full-blown fear as the pandemic is rapidly evolving globally, impacting travel worldwide with its continued spread. It has become even more important now to give due diligence in selecting an insurance policy, especially one that includes coronavirus coverage.

Standard Travel Insurance provides a safety net allowing you to book travel without worry. It is designed to cover many top concerns and monetary risks of travelling, including delayed flights or missed flights, cancelled tours, lost baggage, theft and unexpected illness. 

A good comprehensive travel insurance plan can protect you from losing thousands of dollars in non-refundable bookings because of an unforeseen event. 

But what about COVID-19?

Are you eligible for trip cancellation or trip interruption benefits if you become sick with COVID-19 before or during your trip or eligible for emergency medical care if you become sick with COVID-19 during travel?

Understand the policy terms.

If you have bought travel insurance before a certain date where the insurance company considered COVID-19 an unforeseen event, then you do get the benefits given in the policy provided all the criteria is met while claiming cover. 

But if you have purchased an insurance policy after the insurance company’s cut off date when they declared COVID-19 as the foreseen risk, you may not get cover due to the “foreseen” clause or pandemic exclusion. 

However, many insurance companies consider COVID-19 as any other medical condition and are extending benefits for emergency medical, trip cancellation and trip interruption if you unexpectedly contract COVID-19 after you’ve purchased the insurance. Therefore, it depends on the insurer and what type of coverage you have.

What is foreseen and an unforeseen event?

Under Foreseen Event - Travel protection plans do not generally cover losses directly or indirectly related to known, foreseeable, or expected events, epidemics, government prohibitions, warnings, or travel advisories, or fear of travel.

Under Unforeseen Event - Travel insurance can cover unforeseen events, including unexpected illnesses, terrorist attacks, inclement weather and natural disasters, and other events that cause a complete termination of travel, such as a strike of a travel provider.

What to look for in COVID-19 covered policy

In addition to the standard travel insurance, the following should be explicitly mentioned -

Cover for Trip cancellation - If you have to cancel a trip before departure because either you, your insured travel companion or perhaps someone you need to care for contracted COVID-19.

Cover for Trip delay - Your trip is delayed due to unpredictable COVID-related regulations.

Travel medical coverage - You (or an insured travel companion) become sick because of coronavirus while travelling abroad and incur health care expenses or require an evacuation.

Most insurance providers that are offering COVID policies are covering these expenses.

Additional cover at extra cost “Cancel for Any Reason” (CFAR)

Many travel insurance companies offer “Cancel for Any Reason” (CFAR) cover at an extra cost only after you have purchased standard travel insurance. This plan will give you the flexibility to cancel the trip and recoup a large portion of your money in case something happens. You can cancel your trip citing any reason, including fears of travelling during the COVID-19. 

This relatively new product is gaining popularity fast. If you opt for a CFAR upgrade, it must be purchased within a predetermined number of days from your first payment of the trip (this date can be within 7, 14, or 21 days). You are eligible only if you insure 100% of your pre-paid, non-refundable trip costs and also, you have to avail of this benefit no later than 48 hours before your departure date.

Note that the reimbursement under CFAR will vary depending on the plan you've selected.

Finer Print

Say you purchased a policy, and it looks like it covers COVID-19; it may not. Ensure you have it in writing that your policy does, and after doing that, there still might be pre-existing conditions. That means even if the treatment of COVID-19 is “covered” in your policy, make sure any pre-existing conditions clause does not exempt you from mentioned treatment. The claims could become very tedious otherwise. 

Another term you need to get clarified is “reasonable and customary charges”, meaning companies will not pay benefits more than their set parameters. If your medical care charges exceed than their “reasonable charges”, you will have to bear the charges.

Know this about travel insurance: