Travel Insurance Coronavirus

Travel Insurance and Coronavirus – A Guide for Informed Consumers

Finding the right travel insurance has never been an easy process.

But searching for travel insurance in an age of the coronavirus pandemic takes that challenge to another level.

Never worry, though, because I’m here to help!

Before I was a travel blogger, I worked as a lawyer handling business insurance cases, so I know a thing or two about insurance works. And I understand how difficult it can be for consumers to sort through the thicket of issues involved in buying travel insurance.

In this consumer guide to buying travel insurance during the coronavirus era, I’ll cover:

  • 5 coronavirus-related risks to consider closely when buying travel insurance
  • How to protect yourself from buying the wrong insurance
  • Where to comparison shop policies

By the end of this article, you’ll understand that there is not yet a magic-bullet solution for protecting yourself against all the coronavirus-related risks associated with travel, but that by being informed and planning ahead you can help minimize your risk.

Before we dive in, there are a few important things we should note:

First, nothing in this article should be construed as legal advice. Selecting insurance is an important and individualized decision that I cannot make for you. Do your own homework. Local laws, regulations, and offerings may vary where you are (I write from a USA perspective).

Second, I strongly discourage you from undertaking any non-essential travel until such time as it is deemed safe by local public health authorities.

Ok, ready to dive in?

Travel Insurance During Coronavirus – 5 Things To Consider

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In this section, I’ll cover five of the most important coronavirus-related risks to think about when buying travel insurance.

Note that a lot of the important questions I raise do not really have satisfactory solutions yet. Please realize that isn’t my fault and that I’m as frustrated with the coronavirus travel insurance options out there as you are. I’ll do my best to keep this guide updated as I find new solutions.

1. Medical Coverage for Coronavirus

A doctor

The first question about coronavirus travel insurance that most people have is:

Will travel insurance cover me if I catch coronavirus on my vacation?

Unfortunately, many travel insurance companies have sworn off coverage for coronavirus, pointing to various policy exclusions (more on those later).

On the other hand, there are still travel insurers who offer COVID-19 medical coverage, you’ll just need to do your research to make sure yours does. If the insurer doesn’t prominently advertise that they cover the virus, that likely means they won’t.

World Nomads, which is currently only selling policies to US citizens, is probably the most prominent insurer I know of advertising coronavirus coverage for travel.

Before you do anything, though, first check to see if your current heath provider will cover you while abroad. Many non-US healthcare plans do, though Americans will likely find they are out of luck.

**Special note for digital nomads**: Another option for getting coronavirus medical coverage as a digital nomad or long term traveler is to get an international health insurance policy like the ones offered by Insured Nomads (their shortest commitment is 2 months). Note that this is health insurance, not travel insurance, so it doesn’t provide protection against the non-medical risks discussed in this article.

2. Trip Cancellation & Cancel for Any Reason (CFAR) Coverage

Plane and passport with words cancellation spelled out

Countries shutting borders on a split-second notice might have seemed far fetched a few months ago, but now that is a reality of life and a known risk of travel. This means almost all travel insurance companies will no longer provide coronavirus-related trip cancellation benefits for newly purchased policies.

That’s also why when the pandemic started the hot take in the travel insurance world was to advise travelers to purchase “cancel for any reason” (CFAR) policies. Often sold as an expensive add-on, CFAR coverage in theory provides the strongest peace of mind for a traveler worried about cancellations.

But, personally, I am not too excited about CFAR coverage right now.

Why?

First, cancel for any reason coverage is quickly getting pretty hard to find, as most insurers simply consider it too risky to sell.

Second, usually CFAR coverage only pays you a portion (e.g. 75%) of the non-refundable portion of any deposits you’ve made.

But here’s the thing:

If you are smartly planning your travels in 2020, you really shouldn’t need to make any non-refundable deposits in the first place because most airlines, hotels, and travel companies are now offering extremely generous and flexible cancellation policies.

That’s why the best way to protect against coronavirus-related travel cancellation in 2020 is simply to do your homework and only book refundable flights, hotels, and tours.

This strategy does come with its own risks, however, so let’s consider those next:

3. Coverage for Financial Default of Airlines, Hotels, or Operators

Picture of travel insurance search for financial default coverage
TravelInsurance.com has a nice interface for finding things like financial default coverage

Let’s say you book out a trip for early 2021, choosing only flights, hotels, and tours that are 100% refundable for any reason. You may think you’re totally protected financially, but in truth you’re not out of the woods!

Here’s why:

A refund promise is only as good as the financial condition of the company making it. And a dirty secret of the travel industry is that right now many companies appear to be selling future services to cover present cash flow needs.

That creates a very real possibility that you could request a refund only to find out the company doesn’t have the cash or, worse, is in bankruptcy.

One way to protect yourself from this situation is to always buy your travel with a credit card, as for USA residents that triggers certain limited consumer protections.

But to truly feel secure, you may want to consider a travel insurance policy that provides coverage for bankruptcy or financial default of a vendor.

You can find such policies quickly using the TravelInsurance.com platform. Run your search, click the name of the insurer, and then look in the pop up box (pictured above) under “Cancellation Coverage” for “Coverage of Financial Default.”

Just be sure to read the terms of the policy carefully, as they are important and vary a fair bit from policy to policy.

4. Repatriation and Political Evacuation

Airplane

In March 2020, thousands of travelers around the world found themselves stuck in transit limbo, unable to get home as countries around the world closed borders with little or no warning.

Once travel re-opens, that situation could easily repeat itself if a country gets caught in an unexpected wave of the virus.

This presents a really tricky problem:

You see, usually travelers in such situations would look to Political Evacuation or Repatriation coverage in their policies. And, indeed, many travel insurers did in fact pay for their insureds to fly home in March.

But the problem is that border closures were unexpected and unforeseen before March. Now coronavirus is a known risk, and thus coronavirus-related border closures are excluded by most policies.

As far as I can tell in my research, most travel insurance providers simply aren’t selling coronavirus-related political evacuation or repatriation coverage anymore.

Hopefully with time some smart insurers will realize this is a huge market need. When I find options, I’ll update this section.

In the meantime, one way to protect yourself will be to closely monitor the local news in your destination before and during your trip. And I don’t mean international English-language outlets. Local news in the local language is usually where you’ll find any hint of a border closure first.

For example, in Argentina many travelers were completely shocked when the country closed borders on March 15th, seemingly without notice. But it wasn’t really all that surprising to me because the Argentinian press had been hinting at that possibility for several days beforehand. In a tight situation, that heads-up could make all the difference.

5. Quarantine Insurance

There are at least 3 different travel situations where you might have a lot of unexpected expenses do to a quarantine. Let’s break them down:

Scenario A: You or a Travel Companion Contract Covid-19 And Have to Cancel Your Trip

This is the one quarantine situation that some insurers, such as World Nomads, have said they will cover. Be sure to check your particular policy, though.

Scenario B: Your Home Country Or Your Destination Imposes Shelter in Place

But what if your home country declares a mandatory shelter-in-place order before your trip? Or what if your destination country declares a mass quarantine while you are there?

Unfortunately, it’s still a bit of an open question how insurers will handle this.

World Nomads says on their FAQ pages that “A ‘shelter in place’ mandated by the government falls under the definition of a covered quarantine on a case-by-case basis.

To me, that isn’t exactly comforting, so I hope they will provide more clarity as we move forward.

Scenario C: You Test Positive for the Virus at Customs or While In Country

Some countries, such as Greece, are starting to say that they will open for tourism and test all arrivals at the airport. I’m a huge fan of this approach from a public health standpoint, but it does create another problem for the traveler:

What happens if you test positive?

At least for now, the answer is not super clear.

Hopefully you’ll have chosen an insurer that provides medical coverage for the virus, but you might also end up with a huge bill for weeks in an airport hotel and other unexpected quarantine costs.

Usually those sort of costs ought to be covered by travel insurance. But, as we’ll see in a minute, there are just so many exclusions that insurers could use to deny coverage that I personally have little confidence I’d be actually covered in that situation.

Hopefully governments will come up with plans to cover these costs for travelers, or insurers will wake up and realize there is a huge market desire for crystal-clear clarity around this.

Until then, my best tip is to not to get on a plane at all unless you have a plan for surviving possible quarantines that doesn’t depend on a travel insurance company.

How to Protect Yourself When Buying Travel Insurance During a Pandemic

The hard truth is that many travel insurance policies just weren’t written to deal with a global crisis of this scale, and so a lot is going to depend on what attitude the insurer takes in interpreting their policies and approving or denying claims.

Here are two crucial ways you can help protect yourself during the travel insurance shopping process:

Check Customer Reviews from March and April, 2020

Smartphone with customer reviews

One of the most important things to look for in travel insurance also happens to be one of the hardest to assess beforehand: how generous or stingy is the insurer in their claims handling decisions?

One thing you can do to get a sense of that is to take a look at customer reviews, and especially reviews from March and April 2020 – the time-frame when many travelers were claiming for losses from the initial Covid-19 outbreak.

Trustpilot typically has the most reviews, but also check TravelInsurance.com, Facebook, and the Better Business Bureau.

Pro tip: Don’t just look at the overall review score, and don’t trust vague and overly positive reviews. Look for reviews of people who actually had to file a claim. A lot of insurers pump up their overall review score by giving out free gift-cards to people who have bought insurance but haven’t actually had to claim anything.

Closely Read All the Exclusions

Travel insurance contract

Insurance policies are usually dozens of pages of single-spaced dense text. Even with my legal background, reading a policy always makes my eyes glaze over.

So while you really should read your whole policy top to bottom before buying, the vast majority of consumers probably don’t actually do that. But, at the very minimum, you definitely must read the exclusions.

Most insurance policies are broken down into two broad sections: the coverage sections and the exclusions list. Exclusions are the part of the policy that insurers most often use to deny coverage, and I strongly suspect that will be even more true during this pandemic.

Exclusions vary from policy to policy, but here are some common ones to watch out for:

  • Pandemic and epidemic exclusions – If you see the words “pandemic” or “epidemic” anywhere in the policy, it is probably not going to provide coronavirus-related coverage.
  • Virus exclusions – Some policies include exclusions for novel viruses. If you see the word “virus” in the exclusions list, it’s not a good sign.
  • Travel ban or “Do not travel” exclusions – Many insurers include exclusions for government-imposed travel bans, such as exclusions that bar coverage where the CDC or the US State Department have issued a warning (as both have done for coronavirus globally).
  • Force Majeure or Act of God exclusions – If you see an exclusion for force majeure or acts of god, be very, very skeptical – especially if the language seems broad.
  • Pre-existing condition exclusions – We know that coronavirus is especially dangerous for people with underlying health conditions. Unfortunately, many travel insurance policies exclude pre-existing conditions, often with broad language that an insurer could try to use to swear off coverage for any coronavirus treatment.

The above are some of the most common, but far from the only exclusions to watch out. Insurers pack policies will all kinds of exclusions even during normal times, and I strongly suspect quite a few will respond to this crisis by writing new dubious exclusions into their policies.

The key is to be an informed consumer and to read closely!

Where to Comparison Shop Travel Insurance During Coronavirus

Comparison of travel insurance policies for coronavirus

At the moment, I don’t yet feel comfortable enough to fully recommend any single travel insurance for coronavirus. Too many insurers burned too many of my readers and followers over the last couple month (I was personally burned by SafetyWing’s questionable refusal to cover coronavirus).

My hope is that, with time, insurers will have enough foresight to adjust their offerings to address the many unsolved issues I’ve raised in this article.

So what should you do in the meantime if you need to find travel insurance?

I suggest running a comparison search at TravelInsurance.com.

Just fill in a few details on that site, and it will pull quotes from dozens or even hundreds of insurance companies. You can then use the handy filters to narrow down the coverages to those most important to you. You can also read over 75,000 verified customer reviews.

Best yet, you can check the “Compare” box for several different policies to directly compare them against one another like in the above screenshot.

Note that they also have a live chat box in the bottom right corner, so if you have questions you can ask them there.

Comparison shopping travel insurance policies is never easy, but TravelInsurance.com provides a ton of info and makes it comparing policies as straightforward as possible.

Frequently Asked Questions

What’s the difference between travel insurance and health insurance?

Generally speaking, travel insurance is meant to cover emergencies while you are traveling. Health insurance is meant to cover health issues more broadly, including things like routine care. There can be some overlap between the two when it comes to emergency medical care.

Will my health insurance cover coronavirus while I’m traveling abroad?

It depends on the health insurance company. Most USA healthcare policies these days probably won’t cover you outside the United States, but it’s definitely worth calling your insurer to check.

Does my credit card travel insurance cover coronavirus?

Probably not. Some premium credit cards do come with some limited travel insurance for trips purchased with the card. Many have pandemic exclusions, though, including the insurance provided by my Chase Sapphire Reserve card.

If I don’t have travel insurance, can I still get a refund for my trip?

Possibly. That’s why I suggest buying only fully refundable fares for now (easier to do, as many airlines have loosened their policies).

What about flights in Europe? Aren’t there special rules for refunds?

Yes. The European Union has a law that requires airlines to offer a full refund for any cancelled flight. But note that the airlines are currently challenging the law, and dragging their feet on providing refunds to many travelers while they do so.

What’s the best travel insurance for coronavirus?

As mentioned above, currently I don’t have a specific company to recommend. I suggest using TravelInsurance.com to run a comparison search so you can do your own comparison depending on what coverages are most important to you.

Can I get a refund on my travel insurance if I don’t take my trip?

That depends on the policy, but probably not. Some annual travel insurance policies are paying back rebates right now for customers who bought before the pandemic, but for new policies you’ll want to check this before buying.

Do I really need travel insurance during coronavirus?

The answer will come down to your personal risk tolerance and ability to fund unexpected costs out of pocket. Personally, I chose to travel with insurance even before the pandemic, and the pandemic makes the case for insurance even stronger in my mind. That’s why it’s so frustrating that the options out there are so insufficient right now.

It seems from this guide like it isn’t really possible to travel right now and have full protection against coronavirus related risks. Is that fair?

Yeah, unfortunately I think that’s a fair description of the situation as it stands. There’s no single insurance policy I know of that covers all the risks I mention, at least for now.

***

That’s it for this consumer guide to buying travel insurance during the coronavirus pandemic.

Please note that this is still an evolving area of travel insurance, so if you don’t need to buy now you might wait a bit to see if new offerings come out. I’ll try my best to keep this guide up to date, so consider bookmarking it to come back to it later if you’re in that boat.

Also, note that all the usual reasons for buying travel insurance still very much apply these days (arguably more so, really). Coronavirus-related risks are far from the only risks travelers face on the road, which is why I choose to travel with insurance.

Lastly, if you have any questions I have not covered in this guide, please scroll down and leave me a comment so that I can address them for future travelers!

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