What is Travel Insurance?
As exciting as travelling can be, there are so many things that can happen to disrupt your trip. From airline and accommodation cancellations, to illness or accident, to needing to return home early due to an emergency.
Chances are by the time you’re on your way, you’ve already spent a pretty penny so making sure you can recoup those expenses or pay for expensive medical care in a foreign country is absolutely vital.
Why should I have travel insurance?
Travel Insurance is covering you for all sorts of unforeseen and unfortunate things, but they generally fall under one of two categories;
Medical Costs overseas
This is a big one, as in some countries medical costs can be significant, where a simple overnight stay can cost you as much as $3,400 in some European countries, and as high as $10,000 in the USA depending on the circumstances. Not only will travel insurance cover these costs, it will also include repatriation costs if you have to be medically evacuated home, or even for an immediate family member to travel to you for support.
And not that anyone wants to consider the worst case scenario, but it’s important to talk about - in the event you or a travelling companion dies while overseas, it will cover the repatriation of your or your companions body back home. This can be a very costly exercise and one no-one wants to bear without insurance.
Your travel insurer is also best placed to assist you while you’re overseas, in finding the best medical care providers and doing all the legwork and liaising for you, so you can concentrate on getting better or caring for your travelling companions.
Disruption Costs and Reimbursement of Expenses and Losses
This is the cover for travel delays, cancellations, re-bookings, lost deposits and the like. An example might be if your accommodation provider cancels and they only issue part refunds, you might claim the balance. Or your flight is delayed and you have to stay an extra night that you hadn’t budgeted or planned for.
This is also where you find the majority of travel claims for things like lost or damaged luggage, damaged or stolen personal items. This cover is usually settled by way of reimbursement, with a claim being made once you’ve arrived back home, however there are a number of insurance companies out there starting to look at this differently and issuing policy holders with temporary debit cards that mean these sorts of claims can be paid in real time, so you’re not out of pocket to begin with.
And the million dollar question - does it cover Covid-19?
There are a couple of aspects to this question;
Travel Insurance is covering you for unforeseen or unknown events. Policies taken out before Covid-19 became a known event (and was subsequently declared an epidemic and then a pandemic) were in the majority of cases (subject to their individual policy terms and conditions) covered for medical expenses and cancellations etc.
However policies taken out after Covid-19 was a known event, are unlikely to cover medical costs or cancellations etc.
Some policies are now starting to include specific Covid-19 exclusions in addition to the pandemic exclusions that apply to many policies as standard.
It is highly unlikely we will see a Travel Insurance policy any time soon that will cover anything to do with Covid-19.
So is there any point in getting insurance if I can’t cover Covid-19?
Absolutely! All the reasons you used to get Travel Insurance are still applicable, even if Covid-19 isn’t covered. Travel Insurance doesn’t have to cost an arm and a leg, but the cost of not having it is far greater.
In the wake of this incredibly disruptive and deadly pandemic, we can assume it will take time to get “back to normal”. Once we’re able to get back out into the world, it's best to work with a broker to navigate the different policies around, especially in light of the changes to this type of insurance since Covid-19.
This article originally appeared on MeyerInsure Blog and has been published here with permission.