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Outbreak of Travel Insurance and Coronavirus

The Outbreak of Coronavirus and Travel Insurance

Just like the plot of a dystopian movie, we slept in one world and woke up in another! The coronavirus pandemic that has caused almost 188,000 casualties worldwide is highly unpredictable and devouring the economic balance of some of the most powerful countries, leave alone the meek ones. And while some major epicentres of the COVID-19 outbreak are sharing first-hand knowledge of their strategies to defeat the virus, the new hotspots are still witnessing exponential growth in the number of cases on a daily basis.

The pandemic has ripped us off our usual ways of life, and some of the major businesses have come to a standstill. So, as we try to foresee the legacy of the deadly virus, the industry that shrieks "disaster" is none other than the 8-trillion-dollar travel and tourism industry.

The Relevance of Travel Insurance During the Coronavirus Outbreak:

The present situation leaves the possibility of only two types of travellers in this new corona-inflicted world: the ones that are not even remotely thinking of travel, and the others who are willing to but are captivated by the "Q" word (quarantine). Many avid travellers have woken up to the horror of cancellations, only to realize that they did not have travel insurance in the first place. Even if they did, it did not cover the losses due to the coronavirus pandemic. What's even more surprising is that most insurers don't consider the cancellations in the face of an epidemic as a legit reason for trip cancellation.

Read Your Travel Insurance Fine Print

If you are planning an overseas trip soon, do make a point to read your travel insurance fine print. Checking all the boxes and agreeing to the terms and conditions without even taking a glance at it is a very yesteryear thing. Let not the doldrums of isolation and social distancing turn you into a desperate traveller. So, making a smart and informed decision about procuring travel insurance seems like the need of the hour.

Does Travel Insurance Cover the Coronavirus Outbreak?

The travel insurance policies mostly cover trip delays, baggage loss claims, and any medical exigencies during travel. Up until now, the insurers did not include cancellations due to pandemics as they would prove to be a considerable burden on them. However, some travel insurance companies are making an exception in these excruciating times and, depending on the county of travel and the intensity of the outbreak, are open for covering cancellations and refunds.

For example, if you had planned your travel to any of the heavily affected countries like China, Iran, Italy, or South Korea, you stand better chances of coverage than to those where the impact was feeble.

In another scenario, a traveller with a known autoimmune condition or severe illness can claim for a full refund no matter the count of the coronavirus cases in the destination country.

If the government has imposed a travel ban to countries that are facing heavy casualties due to the coronavirus pandemic and you still travel, all claims will stand null and void, even if the travel insurance policy states otherwise.

In a far more disturbing plight, if you have already entered the country before the outbreak, do check for the evacuation coverage clause in your travel insurance. The evacuation coverage takes care of the disembarkation cost up to a certain limit. If the evacuation operation is carried out by your county, the travel insurance company isn't left with a choice but to provide refunds.

Purchase of Travel Insurance Post the Coronavirus Pandemic

It seems that the travel and hospitality industry has taken a significant hit due to the strict lockdowns imposed by governments of all countries across the globe. Taking notes from their current experiences, the key players of the insurance sectors have stopped providing coverage for losses incurred due to COVID-19. In a hypothetical scenario, if you had pre-planned your travel and did not bother to take travel insurance, postponing the trip and purchasing a policy will do no good.

Cancel for Any Reason

The "Cancel for any Reason" was the daddy of all benefits that allowed a generous refund of up to 75 percent of prepaid travel costs without the necessity to specify the reason. But, just like every other aspect of our lives, this, too, is undergoing a major revamp. Many travel insurance companies are coming up with stringent policies with even more limitations. The tighter and less generous coverage policies call for planned decisions in the travel landscape going forward. Some of the big names in the travel insurance industry have already revoked their "Cancel for any reason," quoting it as "unsustainable" in the future.

Claims That Will Be Honoured After Coronavirus

Some of the claims, such as lost baggage, unexpected travel delays due to faulty aircraft, a major illness, missed connection, etc. would continue to be honoured by travel insurance providers. However, considering the current landscape, you might have to be a little patient until your claims are requited as the travel companies and insurers work their way out to settlements.

Honesty Is Still the Best Policy

It wouldn't be wrong to say that we are cruising through one of the most remarkable times in history when travel insurance companies, who are otherwise infamous for pushing their products, are being brutally honest about their exclusions. Every pertinent change to the travel insurance underwriting is being called out loud in public so that customers are fully aware of what they are signing up for. If experts are to be believed, once the situation normalizes, insurance experts will surely try their hands on new and innovative policies to flatten the losses.

To our horror, many small travel insurance companies have stopped selling policies as they could not take the blow of catering to thousands of service requests and providing refunds. In such unprecedented times, it would be difficult to comment on the fate of travel insurance. While the world stands still and desperate to re-emerge, let us see by when the travel industry swings back to normal. Until then, just #throwback for the gram.

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