Insuring your travel in pandemic times

Aug 31, 2020 01:33PM ● By Karen Telleen-Lawton

What are your thoughts about traveling in the time of COVID-19? If you or a loved one has contracted the dreaded disease, this question is likely far from your mind, and in that case, I am truly sorry for your ordeal and hope that health has returned to your family.

The rest of us bystanders have so far faced only collateral damage in the pandemic. Some are grateful they had no upcoming trips planned: nothing to cancel and no money to be lost. Others had trips planned and spent the first few months of quarantine navigating the quagmire of reimbursement or rescheduling. Many can’t imagine ever going through that again and have decided during the pandemic to stick closer to home.

Then there are those, like my husband and myself, who—despite enduring canceled vacations—want to get on the road before long. We wonder, what about travel insurance in the time of COVID?

Cancel-lite

The most important change instituted by most, if not all, insurance companies is that they are no longer offering “cancel for any reason” insurance. If you have such a policy, call the insurance company to make sure you understand the terms before you depart on an excursion.

Some policies have a “cancel-lite” option with a name like “anytime coverage,” but it will almost certainly exclude pandemics. To be clear, most policies have always excluded pandemics from their covered reasons. We just never thought it would happen!

Currently, plans typically offer some type of coverage in the event that the insured or a traveling companion contracts the coronavirus or must quarantine while the coverage is in effect. There may even be trip cancellation or trip interruption coverage if a non-traveling family member is diagnosed with a COVID case that is considered life-threatening.

Likewise, if you purchased Emergency Medical and Evacuation coverage, this could be applied. Under these circumstances, reimbursement typically requires a physician’s certification.

Truthfully, if you’re willing to make plans now—even for a date far in the future—you may be able to snag a good deal. For instance, in June, my husband and I paid a deposit for an Antarctic voyage departing late in December 2021. If we cancel anytime up to two weeks before the trip, the travel company will refund all our money.

How can they afford those terms? Both travel companies and travel insurance companies need bookings to remain viable. They are eager to make it worth your while.

Be sure you understand the cancellation policies for various scenarios. Fear of travel, travel advisories or being unable to reach a destination (for whatever reason) are often not covered under general insurance policies. Check “trip cancellation” or “interruption coverage” for the listed events they include. If you’re unsure of the terms, call and ask.

Understand tradeoffs

How do you determine what coverage you need? List the reasons you’re considering travel insurance and determine whether the policy includes those specific concerns. For example, if you book far ahead to get good terms, there’s a risk that the travel company may go bankrupt before your trip. Will your insurance carrier pay off in the case that the travel company is no longer viable?

You may decide not to insure the trip costs of a once-in-a-lifetime trip, understanding that if you miss it for whatever reason, you won’t reschedule. That’s a legitimate gamble.

What is essential for any insurance policy—travel or other—is to insure against catastrophic costs. These are costs that would not just ruin your trip but set your finances back years or bankrupt you in expenses. If you board a boat to Antarctica without medical evacuation coverage, for instance, you may never recover from the medical costs even if you recover from an emergency.

Understand the tradeoffs and choose what’s right for you.