Before the pandemic, many consumers bought travel insurance as a safety net in case they became ill right before or during their trip. Other common reasons included hedging against a natural disaster like a hurricane, or an illness of a close family member.
Virus outbreaks and pandemics weren’t common concerns when people were deciding whether or not to purchase travel insurance. As COVID-19 has continued its assault on travel, the importance of travel insurance has increased exponentially.
Buying COVID-19 Travel Insurance
A travel insurance policy must be purchased before your trip in order to have coverage. If you are interested in insurance protection relating to COVID-19, it’s important to read the policy carefully or confirm with your travel insurance agent that it has the coverage you want.
Travel insurance that will cover problems related to the pandemic will generally not group COVID-19 under “foreseen events.” Foreseen events are not covered by travel insurance. If COVID-19 is not listed as “foreseen,” it won’t fall under the exclusion.
See Forbes Advisor’s ratings of the best pandemic travel insurance plans.
Another way to cover trip cancellation due to the pandemic is to add cancel for any reason coverage to your policy. This escape hatch let’s you get some reimbursement (usually 50% or 75%) if you cancel, no matter what the reason—whether it’s the pandemic, fear of travel or simply changing your mind.
But note that you should add cancel for any reason coverage right away if you want it. You may have only a couple weeks to add it after purchasing a travel insurance plan—and sometimes less, depending on the provider.
Allianz Travel offers a Cancel Anytime product, which is similar to a Cancel for Any Reason policy, and is available through travel agencies. It covers 100% of nonrefundable, prepaid trip costs when canceling a trip for a reason covered by the policy and up to 80% of those costs when canceling for most other reasons.
“Our Cancel Anytime product generally contains exclusions for known or foreseeable events and epidemics, however, for a temporary period, we are accommodating claims for trip cancellation and trip interruption if a customer becomes ill with COVID-19 either before or during their trip,” says Daniel Durazo, a spokesperson for Allianz Travel.
Other Travel Insurance Basics to Have
Travel insurance plans do differ, so it’s important to take the time to examine your choices.
“Single-trip plans are available on an individual trip basis, or if you plan to travel more than two to three times a year, an annual policy could be a good consideration as it can be a cost-saver,” says Durazo of Allianz Travel.
The two main travel insurance benefits are trip cancellation insurance and post-departure benefits.
“Trip cancellation coverage can reimburse lost prepaid, nonrefundable trip deposits for things like airline tickets, hotel rooms, rental cars, tours and cruises,” says Durazo. “Post-departure benefits help cover expenses for baggage loss and travel delays, but most importantly can protect your health and finances by providing 24/7 global assistance and covering emergency medical treatments and emergency medical transportation.”
It’s especially important to consider emergency travel medical insurance if you are planning to travel out of the country.
“If you decide to skip this type of coverage and become ill or injured while overseas, you may find that domestic health insurance plans are not accepted wherever you are receiving treatment, and you may have to pay out of pocket,” cautions Durazo.
Pandemic Fears Play Out in Bookings and Travel Insurance
“Understandably, flexibility, peace of mind and safety are among the most important considerations for travelers right now,” says Erika Sanchez, vice president at Expedia Group.
“Due to the ongoing uncertainty of how the pandemic may impact their plans, more than ever travelers want assurance that they’ll be able to cancel or change their plans without facing any fees or penalties and that they are protected if the unexpected should occur,” says Sanchez.
Expedia sees pandemic fears playing out in the way travelers are now booking their trips: They’re booking refundable rates more often and have an increased interest in travel insurance.
“Travel insurance is one way to get that peace of mind; however, not all policies have the same level of coverage and the coverage as it relates to COVID-19 is nuanced. We recommend carefully reading the terms and conditions of your policy to make sure you understand your coverage as it relates to COVID-19,” says Sanchez.
Travel Insurance Will Be in Demand
In these trying travel times, purchasing travel insurance should be commonplace.
“Potential travelers are looking for protection that covers COVID-19 travel-related losses,” says Bailey Foster, vice president of trip insurance at Trawick International, a travel insurance provider. “For a fraction of the trip cost, you can mitigate the risk of losing your investment if something unexpected occurs by utilizing travel insurance, specifically trip cancellation travel insurance.”
Foster recommends you check your trip cancellation coverage to see if it covers COVID-19. She says that Trawick International was one of the first travel insurance providers to provide coverage for COVID-19, and had been doing so since March 2020.
“COVID-19 will be treated as any other sickness for all illness-related losses by us,” she says.
The travel insurance industry has made moves to adapt to sudden changes in travel plans. For example, Durazo says Allianz now allows customers to move the dates of their travel insurance policy to match the new dates of rescheduled trips, up to 770 days from the original purchase date.
In addition, policyholders can cancel their policy if a travel supplier cancels the trip due to COVID-19 and receive a refund for the cost of their premium.
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