Traveling is riskier than ever, and so businesses and workers are turning to travel insurance to attempt to cover the cost. But while travel insurance has seemingly become more important, some travelers are shocked to discover that their insurance will not cover expected expenses, particularly anything related to COVID-19.
The New York Times in June related multiple stories of families who thought they were safe because they bought insurance, only to lose thousands of dollars because they did not read the fine print. Now is the time to understand what travel insurance is, how it has changed since the pandemic, as well as important tips to buying the right policy.
The Problem with Travel Insurance
Travel insurance as a concept is simple. You purchase it before a flight or trip, and the insurance will cover you in case of an emergency. This emergency can range from a lost suitcase to providing medical care if you suddenly fall ill. In many ways, travel insurance is comparable to a trucker having a semi-truck accident attorney.
The problem is that many travel insurance covers unexpected incidents, leaving you on the hook for expected ones unless you pay more. From a certain perspective, this policy makes sense.
If you book a flight to the Bahamas six months in advance, and then learn a week before the trip that a hurricane will strike the islands, insurance should cover you. But if you book a flight to the Bahamas a few days in advance while you know a hurricane is about to strike, it is hardly surprising that insurance would not want to cover such a rash decisions.
But as COVID-19 became an international crisis, travelers who had bought policies in advance discovered that said policies did not cover them in the case of a pandemic, which left them on the hook. However, the situation is different now. Some travel insurers such as Allianz warn that their protection plans “generally do not cover losses related to COVID-19.”
But other insurers such as Visitors Coverage are offering plans which either provide medical insurance or coverage as long as you got sick from COVID-19 after an assigned date.
However, it is not enough to just purchase a plan which says it provides COVID-19 coverage. Travel insurance is not as heavily regulated as auto or health insurance, which means that there is more leeway for companies to try and include fine details to your detriment.
For example, a COVID-19 insurance plan may only mandatory isolation and not cancellations caused by stay-at-home orders. To prepare yourself, it may be better to purchase Cancel for any Reason coverage, even though that can cost significantly more than normal travel insurance.
Insurance Remains Necessary
Some people may react to these difficulties by concluding that they will just have to risk it and go without insurance. This is a bad idea for several reasons.
The most obvious reason is that many countries will outright deny you entry without insurance. These include most countries in the EU, Russia, Thailand, and many countries in the Middle East.
The main reason these countries deny entry is a reason for why you should get insurance anyways. American medical coverage will not apply overseas. If you get sick whether due to COVID-19 or something else, medical providers will often demand upfront payment which can cost thousands of dollars at least. And with COVID-19 cancelling events and meetings left and right, the right plan can help cover you in an unexpected situation.
Travel insurance will continue to be an increasingly necessary part of travel, and the day may come where it is mandatory as auto or health insurance. Even if that does not happen, travelers should understand that insurance is changing dramatically due to COVID-19.