Coronavirus (nCov) and Travel Insurance

According to the World Health Organisation, Coronaviruses (CoV) are a large family of viruses that cause illness ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS-CoV) and Severe Acute Respiratory Syndrome (SARS-CoV).

A novel coronavirus (nCoV) is a new strain that has not been previously identified in humans. This strain was first reported from Wuhan, China on 31 December 2019.

On the 30th of January 2020, The World Health Organisation (WHO) declared the outbreak of novel coronavirus to be a public health emergency of international concern.

The Australian Government whilst constantly reviewing travel restrictions, decided on the 29th of February 2020 to extend travel bans to include Iran. Other countries such as Italy and South Korea are also being reviewed due to the high number of novel coronavirus in those countries.

As the spread of the virus gathers momentum, a lot of travellers are asking how will their travel insurers respond to novel coronavirus?

What happens if you have booked a plane to Italy and suddenly there is a travel ban, will you get a refund from suppliers such as airlines and accommodation providers? Will your travel insurance cover any shortfall?

If you are in a country that was not on the travel ban, but suddenly it is, will the insurers pay for the additional costs you may incur to come back or stay?

The answer to these questions isn’t always straight forward as it varies from policy to policy and provider to provider.

A policy included with your credit card may be different to that purchased individually for your trip or a corporate annual policy purchased via an insurance broker.

Travel insurance

Most Leisure Travel insurance policies in the Australian market contain an Epidemic, Pandemic or outbreak of infectious disease (including any mutation of such virus) exclusion that applies to the entire policy. This exclusion is generally found in the policies purchased for individual travel by consumers through online purchases, travel agents or insurance intermediaries as well as credit cards offered through a range of banks and financial institutions. Hence, no cover is offered for coronavirus related claims.

Corporate travel insurance policies generally purchased via insurance brokers aimed at SME to corporate businesses tend to be slightly broader in coverage. Whilst most (not all) policies don’t have a specific exclusion for Epidemics and Pandemics, there generally is a policy condition that the “policy holder must observe official travel warnings and directions”.
For example, if the Australian Department of Foreign Affairs and Travel (DFAT) issue a warning not to travel to a country and the policy holder does travel, it is assumed the insured has voluntary decided to take this risk on personally knowing cover would not be granted by the insurer.

What should you do?

As winter approaches the southern hemisphere in the coming months, greater concern and media coverage may create more questions than answers here at home and countries around us.

Insurers are monitoring the situation and their position may move from week to week as more travel bans are announced especially in relation to the corporate policies taken.

In the meantime, if you are not sure about your travel you should:

1. Contact our office and speak to your account executive who will make the necessary inquiry with your insurer based on your circumstances.

2. Look at the government smart traveller website www.smarttraveller.gov.au before making overseas bookings, usually a level 4 alert must have been issued before an insurer will consider paying you for a change of mind.

3. Talk to your airline/accommodation agent as most have been receptive and have offered refunds or rescheduling services.

What’s around the corner?

A number of insurers are starting or considering to offer “cancel for any reason“ travel insurance covers. These new policies or existing policy extensions are starting to slowly trickle into the Australian market with Cover-more introducing this cover in recent years and Travelcard considering such coverage.