Effect of the COVID-19 crisis on travel insurance

Planning travel during the COVID-19 crisis? Travel insurance implications

Given the current environment around COVID-19, all non-essential travel is being cancelled for the time-being, and many Canadians are thinking about cancelling planned trips abroad even later in the year. Some have travel insurance, and some don’t. We’ve tried to break down the implications of the outbreak on travel insurance, below. Note that every insurance company is different, and to know exactly what you’re covered for or not, you need to check with your insurance provider.

The coronavirus/COVID-19 outbreak is all anyone is talking about. The government is advising against all non-essential travel outside the country. This will obviously have implications for people who are currently out of the country, or planning to travel in the near future.

The coronavirus outbreak impacts both the emergency medical coverage that’s typically included in travel insurance, as well as trip cancellation coverage. Let’s look at each separately.

Trip cancellation insurance

This coverage is intended to protect you financially if you have to cancel your trip for reasons beyond your control, including if you fall ill. Typically it would cover you if you contracted a serious illness before leaving home, and you were not well enough to travel.

Because COVID-19 is now a known threat, it may be excluded as an insured reason for cancelling your trip. It all depends on when you bought your travel insurance, and where you are going.

For example, Canada issued a travel advisory on January 30th, warning Canadians to avoid non-essential travel to China. If you had planned a trip to China and bought travel insurance prior to that date, you should be covered. In fact, the government’s subsequent travel advisory would be evidence in your favour to support your claim.

On the other hand, if you bought your ticket to China after January 30th, because the travel advisory had already been issued, you would not have coverage if your trip were cancelled because of COVID-19.

If you are currently looking for trip cancellation insurance, most insurance companies have now excluded COVID-19 from their policies, regardless of where you are travelling. You can buy trip cancellation insurance, but it won’t help you if you have to cancel your trip due to the outbreak.

Emergency medical insurance

This coverage is intended to pay for medical expenses, including hospitalization and emergency evacuation if you are injured or fall ill while away from Canada.

Again, because COVID-19 is now a known threat, your emergency medical coverage could be impacted.

If you bought emergency medical insurance prior to a travel advisory being issued for your destination country, there are a few scenarios you should be aware of.

If you bought insurance prior to the advisory, and left Canada before there was a travel advisory in effect for your destination country, you should be covered if you fall ill with the virus.

However, now that there is an advisory for the whole world, if you get on a plane today to anywhere outside Canada, you would not be covered if you fall ill. That’s even if you bought your travel insurance before the outbreak began. Note that you would be covered for other illnesses and injuries, just not COVID-19.

If you are currently looking for emergency medical insurance for a trip you’re planning, note that there will be no coverage for anything related to COVID-19, either for trip cancellation or emergency medical expenses. If you choose to travel against the advice of the federal government, you are really taking your chances.

Important note

Note that most if not all major travel insurers have now excluded coronavirus/COVID-19 altogether from any policies they sell for the foreseeable future. If you are planning to travel and want to protect yourself from cancellation costs and/or medical costs, be sure to ask your provider specifically what their policy is regarding COVID-19.