As more countries become impacted by the coronavirus outbreak, it’s raising questions and concerns for travelers around the world — and travel insurance has become top of mind. Since the outbreak, there has been a lot of misinformation, including whether or not to purchase travel insurance, as well as how companies are addressing cancellations. Here's everything you need to know about travel insurance and cancellations during the coronavirus.
Consider Purchasing “A Cancel for Any Reason” Insurance Upgrade
According to Stan Sandberg, co-founder of TravelInsurance.com, a standard insurance trip cancellation policy will not provide any reimbursement if you cancel your trip due to fears surrounding the coronavirus. Sandberg recommends a policy with an added Cancel for Any Reason upgrade, known as CFAR, which will increase the price of the premium by approximately 40%. Travelers who opt for the CFAR upgrade should note that while you can cancel for any reason, there are still certain policy restrictions. Restrictions include the need to purchase the CFAR upgrade within a set amount of days after the initial trip payment (usually 21 days or less) to be eligible. In addition, the cancellation may not occur within 48 hours of departure, meaning you can’t change your mind and decide not to go on your trip as you are heading to the airport. The amount of a CFAR reimbursement is usually between 50% to 75% of the total — not 100% of your expenditures. Residents of New York State should note that the state does not allow CFAR upgrades to be sold.
Read the Fine Print on Policy Exclusions and Restrictions
Most insurance plans include exclusions for travel to a restricted country. The U.S. Department of State. Many travel insurance plans exclude losses caused directly or indirectly by an epidemic, which coronavirus is now labeled as. According to Allianz Global Assistance USA’s website, you should refer to your specific policy to find out if it excludes losses due to an epidemic or pandemic.
The Allianz Global Assistance website also points out that travel insurance protection generally excludes losses from known or foreseeable events. The coronavirus became a “known event” on January 22, 2020. If you booked a trip and purchased insurance before the virus was considered a known event, you could be (at least partially) covered. However, if you purchased your insurance after January 22, you are probably not covered.
To understand what coverage you may be eligible for, we recommend reading your insurance policy thoroughly — including the fine print.
Travelers who have a CFAR policy should be eligible for refund of 50% to 75% of their airfare, depending on the specific policy. Some airlines are also directly contacting passengers who may not have purchased travel insurance. Airlines are also suspending change and cancel fees, and allowing for far more flexible policies for those who did not book with a CFAR policy. Contact your airline directly (Twitter is a great customer service resource) to verify policies and make changes.
Travel Insurance on Land and Sea
Cruise Line International Association (CLIA) is a leading voice in the cruise industry, and many of its members have adopted enhanced screening measures to try and identify passengers who may have come in contact with the virus prior to embarkation. In spite of these vigilant measures, if you have booked a cruise and are considering cancelling, a CFAR policy should help to recuperate part of your expenses.
Hotel chains, including Hilton and Marriott, are waiving cancellation fees for guests with reservations in areas of the world experiencing outbreaks of the virus. If you have reserved a hotel room in an area that has not seen a viral outbreak and want to cancel, a CFAR policy should refund part of your costs. (This includes bookings made on third-party sites, as well.)
For travelers who have booked a group tour and want to cancel, a CFAR policy is still the best bet. Some reputable tour operators have broadened their cancellation policies; check with your tour operator if you have any questions or concerns. Additionally, Amtrak is suspending change fees to accommodate concerned passengers on all new or existing reservations made before April 30.
For more in-depth information, you can read up-to-date information on the coronavirus here.
The spread of the coronavirus is a fast-changing, fluid situation. If you plan on traveling, keep monitoring. Note that we will also be updating this article as more information becomes available.