Travel Insurance & Coronavirus: What's Covered?

There is much confusion, understandably, surrounding travel insurance. What is covered, what add-ons do I need? What is the difference between this or that policy? And now in the wake of the novel coronavirus Covid-19, travel insurance has become even more nebulous as many people are realizing their current policies aren’t helping where it’s needed.

Jump to: Coronavirus Event Status | What Kind of Travel Insurance Do I Need? | How Much Risk Am I Willing to Take | Travel Protection vs Travel Insurance | Travel Protection Overview | Travel Insurance Overview | Choosing a Travel Insurance Policy | Trip Cancellation & Interruption Overview | Trip Cancellation vs CFAR | Travel Medical Insurance Overview |

Many travel companies, tour operators, hotels, and airlines right now are willing to waive certain cancellation policies and restrictions given the nature of Covid-19 and how quickly it’s spreading around the world. 

Some insurance companies as well are loosening restrictions and allowing claims that are coronavirus related. New York recently announced that insurers and agents would be able to offer Cancel for Any Reason, previously not permitted in New York due to state regulations. 

To ensure you get the most peace of mind and are covered where it counts, it’s important to understand how travel insurance works and what policies are best when traveling in the time of coronavirus.

We’ve read through all the fine print to help speed you through your choice.

Here’s everything you need to know:

User Decision Steps:

1. What kind of insurance do I need?

• What am I worried about?
• How much risk am I willing to take?

2. Which companies are best for that type of insurance?

• Coverage
• Price

Summary: Not sure, don’t want to research the fine print of all your personal medical insurance and different travel providers? Get CFAR and Medical Evac from one of these 3 top rated insurers: TravelEx, Travel Guard, Allianz.

Jump to: Top Insurance Companies Compared | Best Travel Insurance Companies for Coronavirus Concerns | Types of Plans and What They Cover

Important Note Regarding Coronavirus “Event Status”

As of January 21st, 2020 Coronavirus was deemed a “known” or “foreseen” event - that is an event that has a reasonable expectation of occuring. This means that coronavirus is not covered as a cancellation reason under normal Trip Cancellation for “unexpected events”. 

Additionally, not all standard travel insurance plans include coverage for things like epidemics or pandemics. Some may cover “unexpected events” like a weather related issue (tornados, hurricanes, etc). Once an event becomes “known” it no longer counts as “unexpected.”

If you purchased travel insurance prior to January 21st, 2020, you are probably eligible for certain coronavirus related cancellation coverage, however you will need to contact your insurance provider. 

If you purchased travel insurance after January 21st, 2020 (or after your travel insurance company deemed coronavirus a foreseeable event) you are not covered for coronavirus cancellation unless you purchase a CFAR upgrade.

What Kind of Travel Insurance Do I need?

When choosing travel insurance, there are some key factors to take into account. 

1. Are you planning adventure activities? You’re probably not covered for injury under a basic plan

2. Does your trip involve multiple flights to different countries? A basic trip cancellation / trip interruption insurance plan is advisable

3. Might you need medical assistance while abroad? A Travel Medical insurance plan will help you have the most comprehensive coverage. (Most American health plans do not cover you when you’re overseas).

How Much Risk am I Willing to Take?

If you are young and healthy, the odds that you need anything behind a basic Trip Protection or Basic Cancellation insurance are low. 

If you are planning any kind of adventure activities and you don’t buy a supplement or a plan that includes high risk activities, you do so at your own risk as these activities may result in injury or death that won’t be covered under a standard plan.

If you think you may need to cancel your trip due to illness (yourself or a family member) this is generally covered under Basic Cancellation, though may not be fully reimbursable under a Trip Protection Plan.

Is there a difference between a Travel Protection Plan and Travel Insurance?

Yes. These two terms are often used interchangeably but there is a difference. And it’s important. A travel protection plan (also called a Trip Protection Plan) is typically an add-on offered through a third party service, whereas Travel Insurance is more comprehensive and generally more legit.

Travel Protection Plans

• Low coverage
• Cheapest option (unless you need to use it)
• Available through airlines and third parties (such as Expedia)
• Single trip only

“Travel Protection Plans” provide light coverage and are typically offered when booking flights, through a tour operator, or trip planning services like Expedia. Travel protection is an add-on product that you can purchase while in the process of booking the trip. 

Rather than traditional insurance, these plans don’t always provide cash reimbursement. Instead you can receive travel credits for future dates or a waiver of cancellation fees. 

What do they cover?

This is where it gets tricky. While these plans can cover similar things to a basic travel insurance plan (cancellation, lost luggage, illness), they tend to have heavier restrictions. 

In some cases they are only applicable in the US and don’t cover international travel. They may also only cover a portion of your trip, and instead of covering cancellation they issue travel credits for a future date. They usually have much lower coverage amounts.

If you don’t already have travel insurance, the trip protection plan is an affordable, quick, and easy alternative. But make sure you’re aware of what’s actually covered.

When should you consider a Trip Protection Plan?

Our advice is that generally you shouldn’t. These plans are restrictive and often scammy. Cheaper usually isn’t better when insurance is involved. 

However if you’re young, healthy, and not worried about the possibility of paying out of pocket for something that isn’t covered, this is a quick and affordable option for a small amount of peace of mind.

• If you’re not traveling with valuables (lower baggage loss reimbursement)
• If your trip does not or will not involve any adventure sports that could result in injury 

Where to buy?

• Through tour operators or cruise lines 
• Online travel agencies
• Various trip planning assistance services like Expedia and Orbitz
• Airlines

What is Travel Insurance?

• More comprehensive coverage
• Many options: available for single trips or on an annual or multi-trip basis
• Recommended for more lengthy or more regular travel

In contrast to most trip protection plans, travel insurance is an official insurance product regulated by state insurance agencies.

These plans are far more comprehensive than trip protection plans - helping protect you financially against a myriad of issues that you may encounter on your trip, from a lost or stolen bag to personal injury. 

Travel Insurance companies typically have plans available for a wide base of needs and traveler types. You can purchase anything from single trip plans to annual plans. 

Depending on how frequently you travel there are several choices to ensure you are covered.

Commonly covered by basic travel insurance:

• Cancellation
• Trip interruption
• Medical emergencies
• Lost or stolen luggage
• Serious illness or death

Commonly not covered by basic travel insurance:

• Leaving belongings unattended
• Participating in high risk activities*
• Travel in unstable or dangerous regions
• Unapproved medical conditions
• Epidemics and pandemics (varies)
• Fear of travel or travel warnings from government bodies

*If you know you will be engaging in adventure travel activities, you can find plans that cover this or buy a supplementary add-on. 

Where to buy?

• Through reputable travel insurance companies. Popular options include: TravelGuard (AIG), Generali, and World Nomads
• Via a travel insurance marketplace. Popular options include: Squaremouth, InsureMyTrip

See below for more scenarios and choose the best plan for you

Generally speaking there are two broad buckets of travel insurance: Trip Cancellation & Trip Interruption coverage and Travel Medical Insurance. 

Often both of these are included in standard policies, but not always. So first let’s break down what each one means:

Trip Cancellation & Trip Interruption 

Unexpected circumstances can always occur either before or during a trip. Most travel insurance policies help cover if you need to cancel your upcoming travels, or if something happens during your trip that disrupts your plans. 

Examples

If you get called to Jury Duty for a period of time that overlaps with your trip dates, this is usually covered under Trip Cancellation.

If you are delayed or miss a flight due to coronavirus quarantines, Trip Interruption insurance can help you with accommodations or other necessities*.

*Note that for most insurance companies you will need to have purchased your insurance plan prior to coronavirus becoming a “foreseen event”, which happened on January 21st, 2020, in order to claim Trip Interruption from coronavirus.

Most basic travel insurance policies include some Trip Cancellation coverage. You can usually cancel at any time, even up to the day of departure.

Although it does depend on the individual policy, below is a fairly standard list of reasons you can cancel a trip and be refunded through the travel insurance company:

• Unexpected death or injury
• Hospitalization
• Extreme weather events
• Unforeseen natural disasters*
• Legal obligations

*Note that as of January 21st, 2020, coronavirus is no longer defined as an “unforeseen event” by most insurance companies. 

“Trip Cancellation” vs “Cancel For Any Reason”

You probably didn’t know that there is actually a difference between trip cancellation coverage and being covered for cancellation for any reason. And you’re not alone. At the outset these two options sound extremely similar.

The main difference is: Most general travel insurance policies don’t include a “cancel for any reason” clause (known as CFAR) but they usually include “trip cancellation” coverage. Cancel for any reason is an upgrade offered by most travel insurance providers. 

Cancel for Any Reason

Cancel for Any Reason is an expensive upgrade - you must insure the full trip cost. But CFAR is the only option for covering coronavirus cancellations. If you are booking travel now (after coronavirus has been named a “known event”) is a highly recommended add on if you are concerned about needing to cancel your trip due to coronavirus. 

Be sure to purchase this upgrade quickly. To be eligible for use, it is generally required that you purchase CFAR within 14-21 days of the first money down on your trip. For some travel insurance companies, you may be required to purchase the CFAR upgrade at the time of purchasing your insurance plan.

CFAR applies only to cancellations made 48 or 72 hours before your departure date (refer to your plan for details on when cancellation must be made). 

Usually Cancel for Any Reason reimburses only up to 75% of your total trip costs (policies vary, but you should not expect CFAR to reimburse in full). 

Notable Exceptions

Collette Travel’s CFAR policy will reimburse their travelers 100% 

The Breakdown - Trip Cancellation vs CFAR

So why use CFAR?

• CFAR is the only option for coverage if you need to cancel due to coronavirus.

Insurance policies that include Trip Cancellation will not cover for risk aversion. If you are afraid to travel because of coronavirus - particularly understandable if you are planning to travel with elderly individuals or people who are more susceptible to contracting the virus - the only cancellation option that will cover some of the costs is CFAR.

Even if there is a CDC warning against your destination, this is not a reason for cancellation that is covered by Trip Cancellation. CFAR will help cover you in this instance. 

Example

If you are traveling to a potentially unstable region where your safety could be at risk. Trip cancellation does not cover cancelling travel due to political or civil unrest in your destination. So if events occur that suddenly make the destination unsafe for civilian travel, you would be covered under CFAR but not basic Trip Cancellation.

Travel Medical Insurance

Travel medical insurance is designed to provide coverage for health related issues that may arise, and are not covered or included in a basic travel insurance plan provided.  

While you of course are covered for many medical issues by your regular Health Insurance, these plans may not pay for services outside the US. Travel medical insurance helps cover you for healthcare received while traveling overseas. 

Travel medical insurance typically also includes Emergency Medical & Evacuation. 

From popular travel insurance marketplace, Squaremouth:

Emergency Medical coverage can reimburse you for the costs associated with medical treatment for an illness or injury during your trip. This can include coverage for physician services, ambulance services, and hospital charges, among other expenses.

Medical Evacuation is included alongside Emergency Medical coverage. This benefit can arrange for your transportation to the nearest hospital in the event of a medical emergency, and can bring you home if the hospital determines it’s necessary in your situation.

Source: Squaremouth

Most general travel insurance plans include a minimum amount of emergency medical coverage, but if you are older, feel that you could fall ill, or are engaging in potentially dangerous adventure activities, additional or more comprehensive travel medical insurance is essential.

Where to buy Travel Medical Insurance

• Through travel insurance companies. Some will provide more comprehensive medical benefits than others. Travel Guard (AIG), Generali, and Travel Insurance 4Medical (UK only) are recommended.

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