Travel Takedowns: Are You Covered?

Travel insurance concerns and interest have skyrocketed since the advent of Covid-19 but coverage is not always clear

The scene is a familiar one of late and could happen to you. You booked a trip – an expensive one. It involved a cruise around Asia, a private tour in Japan and some upper class seats on international flights. That was in January. Then February happened and everything changed.

As flights were canceled and quarantines created walls against inbound travel, you canceled plans, one after the other, not waiting to see what would happen.

And then you waited. Refunds were not instant and might not be not forthcoming. You sat on endless phone loops and waited for callbacks, checked your accounts, steamed, paced and sat tight.

Eventually things loosened up, refunds came through and refunds did not come through. And even today, it is not over. You lost valuable deposits and fees and you comfort yourself by saying that at least you are home safe and did not get sick.

This happened to a Los Angeles couple setting out on an expensive six-week course across Asia, a luxury trip that included the purchase of travel insurance.

Did they have “cancel anytime” insurance? They weren’t sure. Did they have Covid-19 insurance? Their eyes went blank.

“What? Covid-19 was not even a thing?” said the Los Angeles periodontist who asked not to have his name used. “We just knew there was a global pandemic erupting and did not want to get stuck in Japan or Australia.”

Fortunately, they received all their funds back from the two-week cruise they had booked – including the cost of the travel insurance they purchased from Allianz. But it did not work out so well with Inside Japan Tours, which held onto their sizable trip deposit – calling it a “research charge.”

Cases like this continue to plague the industry as travelers think they are insured and then find out they forgot to purchase the plan with the “acts of God” clause.

For those travelers looking to step out now, possibly between waves and spikes of cases this summer, Seven Corners, a global travel insurance company, has launched a travel medical insurance plan that covers COVID-19. It is called Liaison Travel Plus. There are few, if any, companies that specifically name Covid-19 exposure in the coverage line-up.

The Liaison Travel Plus plan is designed to protect travelers in this new environment. Liaison Travel Plus includes a benefit that covers medical expenses if a traveler becomes ill with COVID-19 while traveling outside their home country. This COVID-19 treatment benefit covers up to $100,000 in medical expenses for COVID-19, SARS-Cov-2 and any mutation or variation of SARS-CoV-2. The plan also includes an additional $500,000 for emergency medical evacuation and repatriation to transport a traveler to a medical facility with appropriate care, if medically necessary. It is important for customers to realize that even if they have domestic health insurance, it likely will not cover medical expenses incurred abroad or emergency medical evacuations.

Coverage can be for five days or up to a year in amounts of $50,000 to $1 million, depending on age, with deductible ranging from zero to $5000. Premiums include trip delays expenses, lost luggage and other hassles of travel.

InsureMyTrip is also a popular name that pops up in conversations about travel in the time of Covid. They tout a Cancel for any Reason policy and explain how this works:

Example: A traveler is having second thoughts about going on vacation, after a new hot spot for Covid-19 emerges. Her family vacation costs $4,000.

Q: Can she back out of the trip and still get her money back? The traveler has travel insurance that includes a cancel for any reason benefit.

A: Yes, if the traveler has met all requirements and submitted the proper paperwork, she can expect to be reimbursed 50-75 percent of the non-refundable trip cost (the exact amount depends on the plan).

Example: A traveler wants to cancel his tropical vacation, after a hurricane caused some mild damage to the area. He no longer wants to go.

Q: Can he back out of the trip and still get his money back? He paid over $2,500 for a flight, hotel stay, and an excursion. This traveler has standard trip cancellation coverage. No cancel for any reason coverage.

A: No. Standard trip cancellation wouldn’t apply. His resort was still open and flights were running as scheduled. The only opportunity to cancel a trip for reasons other than those listed as “covered reasons” on a policy is cancel for any reason coverage.

Insuremytripoffers some other important considerations when considering cancel for any reason coverage:

• It’s usually optional. Think of it as an upgrade to a standard comprehensive travel insurance plan.

• The entire trip must be insured. That means the traveler must add up all pre-paid, non-refundable trip expenses, and provide an accurate trip cost.

• Yes, you’ll pay more. Generally, plans that include a cancel for any reason benefit do tend to cost more. It may run an additional 40-60 percent more than a standard plan.

• You still must file a claim. Any time reimbursement is requested from a travel insurance company, paperwork must be filed.

• Procrastinators miss out. That’s because travelers must purchase this coverage within 14-21 days of making an initial trip payment or deposit.

• No last minute cancellations. The trip must be canceled no less than two days prior to departure.

• Don’t expect all your money back. Reimbursement is usually 50-75 percent of the entire prepaid, non-refundable trip cost. The exact reimbursement percentage depends on the plan purchased.

• It’s not available in all states.

Bottom line: Travel insurance plans with optional “cancel for any reason” coverage included will offer the most protection for travelers who may want coverage for Covid-19.  While some standard trip cancellation policies may cover physician-ordered quarantine or contracting the virus (unless pandemics are specifically excluded), these policies do not cover Covid-19 related cancellations due to fear of travel or any government-ordered border shutdowns. That’s why a cancel for any reason upgrade is recommended.

“So many travel insurance policies are set up for consumers to lose,” said Ms. Balber of Consumer Watchdog, in a recent New York Times interview — noting that policies including medical coverage abroad, where your own health insurance may not kick in, may be worthwhile. “But the devil is in the details and that is doubly true when it comes to travel insurance.”