Travel Insurance x COVID-19: What You Need To Know Before You Book or Buy
“They shouldn't even call it insurance. They just should call it ''in case shit…l give a company some money
in case shit happens. Now, if shit don't happen, shouldn't l get my money back?” - Chris Rock
If you’re like me, this has been your stance on the idea of any insurance (except medical) for pretty much forever. The thought of giving money to a corporation, every month, for something you might not even need is mind-boggling.
Until you need it.
Enter a girl called COVID-19 who said “AH-AHT” on all things travel for the first part of 2020, and possibly even until the rest of the year. Thankfully, most airlines have offered some very flexible options when it comes to changing or canceling flights, but if you had a non-refundable reservation on the books, chances are your only saving grace is going to be travel insurance. And that’s only if your claim is actually covered—because the business of insurance is NOT based on getting you your money back every time. This is when knowledge is definitely power and hedging your bets is key so you can come out on top.
First, a disclaimer: I am not a travel insurance agent. The below should be taken as a general guideline based on my experience as a frequent traveler and travel planner, and not as expert advisement from a travel insurance professional.
Second: It should be noted that most travel experiences, such as our 2021 #TravelFly Solo Week Thailand experience (you coming?) are non-refundable. This is how most trip organizers can get the absolute lowest prices with tourism companies, etc and pass those savings to you! So if you’re considering joining us in Thailand or any other trips with our fellow travel brands—absolutely read the fine print. And then get travel insurance to protect your purchase!
What Does COVID Mean for Travel Insurance?
When it comes to COVID-19 and travel insurance, I’ve got some good news, and some bad news.
The bad news is that there is no “industry standard” that pertains to COVID-19, meaning none of the major travel insurance carriers are handling this situation alike. Which means it’s confusing as hell. Here’s a simple breakdown that should help:
The COVID-19 virus itself is not covered by most insurers. Why? Because epidemics and pandemics traditionally are never covered. Why? Because they can’t be evaluated. Says Henrik Romberg, chief commercial officer at Generali Global Assistance: “Insurance is there to cover things where the risk can be assessed...Pandemics or epidemics tend to be extremely unpredictable and have a very broad geographic impact. As a result, insurers really lack the proper tools and underwriting guidelines to properly price such risk.”
Fear of traveling is not covered under most travel insurance policies. So if you’re simply concerned, or afraid of traveling during COVID-19 and think you can buy travel insurance that will cover that OR that your policy can bail you out—think again. This has been in place long before COVID-19. For example, you can’t file a claim against your insurance if you’re “afraid” of a destination or to fly.
When COVID-19 was declared a pandemic by the World Health Organization (WHO)—it was deemed as a “known risk” or “foreseen event.” This means that the chances for it to be covered after that date was pretty much zero. Why? Travel insurance is meant to cover unforeseen events such as falling and breaking your leg, a hurricane, job loss, illness, or the sudden death of a loved one. THIS is an important factor to remember when buying insurance. Think about the future and the now.
Living in a country or state that has a “shelter in place” order is not a cause for a claim. Why? Because these orders are not seen as quarantines as defined by the CDC. Yes, you read that right. Here in the United States, we are not under a federal quarantine at the time of publishing this piece. Though the word is used a lot, it’s not our official situation. A federal quarantine can only be authorized via an Executive Order by the President, and to date that has yet to happen.
So now you may be asking yourself “so what is the point of getting travel insurance during COVID-19 then?” Because it may feel like the odds are against you. This is when the good news comes in…
First, travel insurance is ALWAYS a good idea. Because the “shit” that Chris Rock is talking about can happen, and if you really think about it, COVID-19 has proven just how unpredictable life is. Period. So it isn’t a question of if you should get travel insurance, rather what kind should you get? And this is what insurance companies don’t want to tell you—there’s a way to make it work. Let’s continue with our breakdown of the GOOD:
Trip cancellation coverage is included in most plans. This means that if you are injured, experience the death of a loved one or your travel partner, or have a loss of employment and need to cancel your trip you can recoup your money spent on non-refundable fees. And all of these things are currently amplified due to the fallout of COVID-19.
It’s not too late to add travel insurance or an upgrade to future travel. While it’s generally best to obtain a policy shortly after booking travel (especially if you want a CFAR upgrade, see #3), you can add travel insurance to your trip all the way up to the date you travel in most instances. This also includes adding in protections that may apply to your life right now, or to an unpredictable future. For example, if you work in an industry that is incurring massive layoffs and are worried, job loss is a widely covered reason. Or if a post-COVID world may shift how your job operates (consolidation, relocation, etc) over the next year, adding a “Cancelling for Work Reasons” upgrade now, before it happens is a sensible option. It’s all in how you look at it. Being afraid of COVID may get you nowhere when it comes to filing a claim, but there are a good amount of real-life situations related to COVID-19 that may be covered.
CFAR restrictions are changing. So there is really only ONE way to get a fool-proof travel insurance policy. A policy that will have you sleeping absolutely well at night, and it’s called Cancellation For Any Reason add-on. CFAR is not a policy itself, it’s an upgrade that means that you can cancel your trip for any reason and expect to receive at least 50% of your non-refundable expenses back. In general, it’s attached to a standard policy that covers 100%. So in a sense, it’s the “back up” of your back up plan. But, in general you have to purchase this upgrade within three weeks of making your travel purchase—and it’s not available in every state. But COVID has encouraged a state like New York to lift their ban on the upgrade.
So now that we’ve set out the pros and cons to travel insurance in the age of COVID-19, the rest is up to you. If you have travel booked for the later part of 2020 or 2021, it’s time to read all the fine print of your travel insurance policy and make the necessary adjustments. Block an hour off your calendar, call your insurer and ask all the “what if” questions. Think about your life through a very objective, “if anything could happen, what is most likely?” lens. Especially if you are deemed as an essential worker, have loved ones that are especially high risk for a COVID and could possibly succumb to the virus, work in a volatile industry, or suffer from a pre-existing condition like asthma or diabetes that could put you at risk while traveling. And if you don’t have travel insurance, now is the time to obtain it. The time you invest is worth it in the event things go left.
For many of the reasons outlined under “the bad” above, many non-refundable experiences are just that—non-refundable and have no choice but to postpone versus cancel. In any case, the best thing is to be prepared and informed. This means that you need to know all of your options, and travel insurance has more than you may think in the time of COVID-19. Yes, it’s more money to spend on “in case shit happens” but guess what? It’s happening.