Important Information About Coronavirus and Travel Insurance

As the coronavirus pandemic disrupts plans worldwide, many people are canceling trips due to exposure, stay-at-home orders, or concerns about getting sick while traveling. While it’s tempting to rely on travel insurance for reimbursement, many travelers are discovering that such policies don’t always cover trip cancellations related to the pandemic.

How Travel Insurance Companies View Coronavirus

Since early 2020, most travel insurance companies consider the coronavirus a “foreseen event,” meaning that cancellations due to the pandemic may not be covered under existing policies. If you’re looking to purchase travel insurance now, be aware that pandemic-related changes are generally excluded. However, if you bought your policy in 2019, you may be covered, depending on the cancellation reason.

Fear of Contracting or Spreading COVID-19

Unfortunately, fear of illness or a desire to follow social distancing guidelines doesn’t activate your travel insurance policy. Many insurers, including Allianz and AIG, have made it clear that cancellations due to fear of sickness, even during a pandemic, are not covered. While canceling or postponing your trip is the right decision for health reasons, don’t expect your insurance to refund your expenses.

Coverage if You Contract COVID-19

If you’re diagnosed with COVID-19, your travel insurance may offer some financial relief. Cancellations due to confirmed illness are covered by many policies. Additionally, if you contract the virus while traveling, your insurance may help cover medical costs. However, you’ll need proper medical documentation — self-diagnosis won’t be sufficient.

Cancel For Any Reason (CFAR) Insurance

For future trips, consider purchasing “Cancel For Any Reason” (CFAR) coverage. This type of policy allows you to cancel for any reason and still receive some reimbursement, typically between 50-75% of your trip costs. Though it doesn’t cover everything, it offers more flexibility during uncertain times.

The Outlook for Travelers

While most travel insurers aren’t covering coronavirus-related cancellations, efforts are underway to change that. A House Oversight committee is working with travel insurance providers to expand coverage. Additionally, many airlines and hotels are offering travel credits, allowing you to reschedule without losing the money you spent.

When the pandemic subsides, these credits will give you the opportunity to finally take that long-awaited trip.