All About Travel Insurance During Covid-19 Pandemic
The travel insurance sector is likely the most adversely affected by the COVID-19 pandemic, with travel and social restrictions both within and without countries still in force, in an effort to curb the spread of the virus.
With the directives around the omicron variant changing almost daily, and numbers doubling every other day, understanding the impacts to travel and health insurance is like trying to hit a moving target.
But you’re an insurance professional, so that’s sort of your job, right?
Right.
(And we’re here to help you crush your professional goals!)
COVID-19 Travel Insurance
Two years after the pandemic started, we’re into the fourth wave, and insurance companies are feeling the heat as they develop COVID-19-specific policies.
While most insurance policies now cover medical expenses related to COVID-19, depending on the traveller’s vaccination status—quarantining after a positive test, for example—not all policies will cover travel disruptions or cancellations if a border is closed, or a flight is cancelled. Medical coverage per person should be at least $150,000 in a pandemic travel insurance plan.
Fully vaccinated travellers won’t incur extra expenses with their insurance, and so far, the amount covered by insurers hasn’t been capped.
But the same is not true for those who are only partially vaccinated, or not vaccinated at all; they will have the added expense of COVID-19 add-ons to cover medical expenses.
Standard trip cancellation insurance offers 100% reimbursement of non-refundable trip costs; the common ones include illness, injury, family emergencies, and hurricanes.
There are three kinds of insurance travelling clients should now be apprised of:
- Coverage for hospitalization if they develop severe symptoms while travelling abroad
- Trip cancellation insurance, which will reimburse airfare if a border unexpectedly closes, or a flight is cancelled
- Coverage for quarantine expenses, in the case of a positive result from a COVID-19 test; would cover accommodation for a 14-day quarantine
Cancel-For-Any Reason Coverage
Another option for clients is to upgrade to a “cancel for any reason” kind of insurance, which essentially allows the traveller to cancel the trip for any reason not listed under standard trip cancellation, including changing their mind about travelling simply because it’s not the right time to travel; they’d receive partial reimbursement, usually 75% of trip costs.
This kind of insurance comes with a hefty price tag, however, and there is a specific window for claims or cancellations. It can add about 50% to the cost of the travel insurance and must be purchased within two to three weeks of the initial trip deposit.
What’s more, a new COVID-19 “winter plan” for the US imposes new international travel rules and mandates that health insurance companies pay for at-home COVID-19 rapid tests.
It’s all a lot to take in, but traveling safe and healthy during these unprecedented times means understanding the options so you can help your clients make the best options for their needs.
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