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What Coronavirus Means for Travel Insurance

As I’ve previously written, travel insurance protects you in many ways, like:
  • Recovering eligible costs due to flight delays or cancellations
  • Reimbursements for additional travel and transportation and lost prepaid expenses
  • Medical benefits
  • Global assistance for coverage abroad 
However, coverage for travel disruption due to the coronavirus is a large gray area. Much depends on the carrier and policy, but here’s what we know so far. 
Standard Policies Have Limitations 
In short, if you have a trip already planned, fear of catching COVID-19 may not be covered by standard travel insurance plans. In fact, it’s likely to be excluded from coverage because pandemics are considered to be a known factor for travel. The US Travel Insurance Association notes that carriers may cover COVID-19 only if the policy was purchased before January 21, 2020. Some insurers, though, have loosened their restrictions. For example, Allianz Travel is offering the following:
  • “Under Emergency Medical Care Benefit: Emergency medical care for a customer who becomes ill with COVID-19 while on their trip.”

  • “Under Trip Cancellation or Trip Interruption Benefits: Trip cancellation and trip interruption if a customer becomes ill with COVID-19 either before or during their trip.”
“Cancel For Any Reason” Coverage
Your best bet to be covered is by purchasing Cancel For Any Reason (CFAR) insurance. You may recoup 75% or more of your trip, but there are caveats. First, make sure this option is available in your state. Most carriers require that you get this coverage within 14 to 21 days of booking your trip. You’ll likely pay more for adding CFAR coverage, up to 40% of the cost of the trip, compared to the price of a standard policy, which is 7% to 10%. 
Coverage Differs Depending on Policy 
Speaking of caveats, and at the risk of sounding annoying, travel insurance coverage differs from policy to policy. Before you rubber stamp a CFAR purchase, call your carrier and find out the ins and outs of the coverage. The The US Travel Insurance Association hammers home this point: 
“Policies vary; travelers should ensure that they know what their policy covers and contact the insurance company directly with questions,” they recommend. “ should always carefully read their insurance policy’s complete description of coverage and ask questions, as policies do vary.”
Reach Out to Airlines, Cruise Companies, Etc.
Airlines are providing relief in the form of waiving change fees. American Airlines is allowing travel scheduled before April 15, 2020 to be rescheduled or canceled. Delta announced that it’s waiving fees for all travel set to depart in March or April and for tickets purchased in March, 2020. JetBlue is waiving change and cancellation fees for flight reservations booked on or before March 10 for travel March 10 through May 31, 2020. 
On the cruise side, major lines are modifying their cancellation and refund policies as well. Princes Cruises canceled trips through May 10, 2020 and is allowing customers the option to defer payment to a future cruise or receive a cash refund. Viking suspended cruises through May 1, 2020 and is granting customers a full refund or a voucher at 125% of the original cost. Royal Caribbean is suspending cruises through April 11, 2020 and is offering a full refund or a 125% cruise credit if a trip is rebooked and set to launch by December 31, 2020.
Note that these policies can change, so I advise that you visit individual websites for updates. 
With so much uncertainty, now, more than ever, is the time to lean on your travel advisor for the best direction.

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