Despite concerns about the deadly coronavirus outbreak, most travel insurance policies won’t cover you if you simply change your mind about travelling.
So you’ve booked flights and paid thousands of dollars for accommodation and side trips, but now you want to cancel your overseas trip amid concerns about the deadly coronavirus, officially known as COVID-19.
While many jetsetters would rightly be cautious about travelling given the rapid spread of the mysterious illness, the reality is most travel insurance policies simply won’t cover you if you change your mind due to fear.
That’s because travel insurance is intended to only cover what HAS happened to you, not what MIGHT happen to you.
So if you had a holiday planned to Vietnam, for instance, and wanted to cancel because you were concerned about the risk of being exposed to coronavirus, your cancellation costs wouldn’t be covered.
Anyone travelling to a country or region against government advice also risks invalidating their travel insurance.
In short, travel insurers will not provide cover for any event that hit the headlines before your policy commenced, and especially after a ‘do not travel’ warning has been issued.
The one exception could be ‘Cancel-For-Any-Reason’ (CFAR) travel insurance – a product that’s common in the US but fairly new in Australia and offered by Cover-More through various providers, including Flight Centre.
Cancel For Any Reason is a slightly more expensive add-on that allows travellers to cancel pre-arranged travel up to 48-hours before departure for any reason – including concerns over coronavirus – and claim back up to 75 per cent of out of pocket expenses.
You Have Travel Insurance …
… But Are You Really Covered?
Put simply, it depends on when you’re travelling, where you’re travelling to, the type of policy you bought, and importantly, when you purchased it.
Although the World Health Organisation (WHO) officially declared a global emergency on January 30, many insurers cut off claims resulting from coronavirus from around January 20 for travel to China and from January 31 for travel worldwide.
Each insurer actually has its own nominated date for when coverage is valid, so it’s best to check with your provider whether cancellation and medical claims will be covered.
Benefits are likely to be paid up to certain limits on valid policies bought before the cutoff date.
For travel to China, Budget Direct cites January 20 as the date the virus become a known event, while Qantas Travel Insurance won’t cover any event related to coronavirus on policies bought after 6am on January 23.
For NIB, which owns the Travel Insurance Direct and World Nomads brands, the cut off is after 5pm on January 23 for China.
Benefits are likely to be paid up to a certain limit (generally up to 75 per cent of out of pocket expenses) on policies where the right cover was bought, and as long as it was purchased before the insurer’s nominated cutoff date. Those benefits typically include:
- Travel, accommodation and meal expenses if you have commenced your trip and your transport has been delayed or cancelled;
- Medical expenses if you have commenced your trip and you are hospitalised or diagnosed with illness from coronavirus;
- If your transport has been cancelled, delayed or rescheduled before you start your travels.
What About Airline and Hotel Refunds?
If you’ve already booked your flights but are worried about travelling, the best advice is to contact your airline or accommodation provider directly to see if you can get a refund or rebook.
At least 50 airlines including Qantas, Air New Zealand, British Airways, Virgin Atlantic, American Airlines, Delta, United, Air Canada and Cathay Pacific have suspended some or all of their flights to and from mainland China until further notice.
Beijing and Shanghai are among the most affected cities, and some airlines have even cut service to Hong Kong.
Because the virus is infectious and may be able to live on surfaces like metal, glass or plastic for up to nine days, some airlines – including Cathay and Korean Airlines – have taken steps to limit the spread of the disease on flights.
They have suspended the use of hot towels, blankets, pillows and magazines, along with duty free sales and even meals for the time being.
The good news is many airlines are offering full refunds to affected travellers, as well as rebooking flights and changing travel destinations.
But there is no legal obligation for airlines to provide refunds, so it’s best you get in touch with your carrier directly.
Australian travellers who bought their airline ticket using a credit card might also be able to lodge a dispute for cancelled or unfulfilled services.
Similarly, when it comes to refunds on accommodation, you might have a right to a credit card chargeback if the accommodation provider hasn’t provided the service.
This applies if you paid by credit or using a Visa or MasterCard debit card.
Should You Travel?
The epidemic began in Wuhan in China and has been spreading rapidly in other countries, sparking wider precautionary measures as the death toll eclipses that of SARS two decades ago.
The death toll stands at 2,249 (February 21), with more than 78,000 people around the world infected by the Covid-19 virus. Most cases are in mainland China, though clusters have emerged in Italy, Singapore, Iran and South Korea.
While the virus has upended travel and commerce around the world, medical professionals say there’s no need to avoid travelling to a country where few or no cases of coronavirus have been reported.
Bear in mind though, the situation is constantly changing, and insurers and airlines will adapt accordingly.
For anyone planning to travel, the website of the World Health Organisation is a good starting point. The WHO has been issuing daily updates about the spread of COVID-19 and the status of cases.
To best understand how you or your travel plans might be affected, call your insurer, airline or accommodation provider to talk through your specific circumstances.
The Australian Government's Smartraveller website has information about the coronavirus outbreak for travellers, including what to avoid during your trip, and what to do if you feel sick at any time during your travels or after your return.
© 2020 Bernard O’Riordan (Travel Instinct). All Rights Reserved.