Will travel insurance protect you during the coronavirus outbreak?

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By Christopher Elliott

David Klement wants to know if his travel insurance will protect him during the coronavirus outbreak. Specifically, could it get him a full $15,506 refund for his Grand Circle Travel tour of India?

The question — “Will travel insurance protect me during the coronavirus outbreak?” — is driving travelers a little crazy during the pandemic. After all, they bought travel insurance believing it would fully protect them. And by “fully protect,” they mean being made whole if something catastrophic happened.

And then something catastrophic happened.

There’s no need for me to rewind the events of the last few weeks. But there’s one thing all of these coronavirus refund cases have in common: They were cancellations made for legitimate health concerns. We’re talking State Department warnings, closed borders, countries on lockdown. No one chickened out or decided they didn’t feel like traveling. Klement and others would be crazy to go anywhere at a time like this.

Among their discoveries:

  • Travel insurance covers you in limited and very specific circumstances.
  • “Cancel for any reason” policies may not make you whole — at least not the way you think.
  • Pandemics are often excluded from travel insurance.
  • When all else fails, polite self-advocacy is the best tool for getting more.

By the way, our advocates are ready to help you if you have a coronavirus cancellation question. You can fill out our help form or leave a question on our forum.

This is when insurance will protect you from the coronavirus

So under what circumstances does travel insurance protect you during a coronavirus outbreak?

  1. If you have a “cancel for any reason” policy and you cancel. Some exceptions apply. For example, Klement’s policy didn’t offer a refund, but a voucher. And most “cancel for any reason” policies only pay a percentage of your trip costs (somewhere between 50 and 75 percent).
  2. If you’re infected with coronavirus while you’re traveling. Travel insurance protects you if you get sick while you’re traveling. That can be a coronavirus infection or the common flu. It’s covered by every travel insurance policy.
  3. If your insurance carrier lets you transfer your policy to another trip. Travel insurance companies have done that. For example, Allianz Travel Insurance has allowed customers to change their plan’s effective dates to cover a new or rescheduled trip. It’s also offering refunds for the cost of your travel protection plan for a limited time.

Cancel for “any” reason? Maybe not

Klement had taken every precaution. When he booked his trip, he also purchased a “cancel for any reason” travel insurance policy. But when he tried to cancel, he discovered that there were limitations.

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“Unfortunately, conditions of reimbursement do not match the unique pandemic now underway,” he explained. “We were offered a voucher good for the next 12 months. If we don’t use it, it’s lost.”

Klement asked for a full refund since he’s skeptical the coronavirus will be contained by next February.

“They empathized with our dilemma but said they could not contradict policy,” he says.

Even after a polite appeal, the answer was the same.

“If you have a valid reason for not being able to travel by that time, please call our traveler support team and they can submit an exception on your behalf,” a representative told him. “There will be no further review of this situation. I understand this is a frustrating matter but we have a policy and until proven that it cannot be worked out, we will not bend this policy.” (Emphasis added.)

An “act of God” excluded from most insurance claims — even during the coronavirus outbreak

Consumers are only now discovering that their policies have limits and may not cover them during the coronavirus outbreak.

Consider what happened to Jane Finn, who booked a trip to London through Huron Tours. She also added a travel insurance policy as a precaution.

Her policy is a little complicated. Like other “named perils” policies, it doesn’t cover fear of travel. But a closer look would have revealed that it also excluded losses due to a pandemic. And even if she’d had a policy that covers pandemics, her insurance company isn’t selling coverage for losses that occurred on or after March 11, 2020. That’s the date coronavirus became a pandemic. Pretty much the only way her travel insurance would cover her is if she took the trip and got coronavirus. (Here’s our guide to travel health and safety.)

When she asked the tour operator if the policy covered her cancellation, it had a refreshingly honest reply.

“We are afraid that for most people the travel insurance isn’t going to provide any satisfaction,” a representative told her. “This is a once-in-a-lifetime act of God that is excluded from most insurance claims.”

Finn has not lost it all, though. Huron is negotiating a refund with its suppliers, but has warned Finn that not all components are refundable.

“We are waiting to find out what that refund will be,” she says.

If travel insurance doesn’t protect me from coronavirus, can I get my policy refunded?

Gary Karp’s travel insurance didn’t protect him when Norwegian Cruise Line canceled his cruise. It didn’t need to; NCL offered a full refund.

“They are not refunding the cruise insurance which was booked with the cruise,” he says. “I called NCL’s 800 number and spoke to a representative. The representative did not provide any additional information, just saying that the travel insurance wasn’t refundable.”

But wait. Since NCL canceled the cruise, shouldn’t it refund everything, including the insurance?

NCL’s coverage, called Booksafe, is a complex product. Nationwide Mutual Insurance Company and Affiliated Companies, Columbus, Ohio, underwrite it, with medical evacuation provided by On Call International. A refund would be at the discretion of the insurance provider. The policy doesn’t say anything about refunds in case of a cancellation. Usually, if insurance doesn’t specifically promise something, then it won’t do it.

Even so, I’ve been hearing of insurance policy refunds happening during the coronavirus crisis. In this topsy-turvy world, everything is negotiable — even a refund of your nonrefundable travel insurance policy.

For this traveler: A happy ending during the pandemic

But there are some travel insurance cases with positive outcomes. Gerald Phelan’s case is among them. He decided to cancel his Regent Seven Seas cruise in February. It included a travel insurance policy from AIG Travel Guard, which was nonrefundable.

“I requested a full refund of this premium,” he says. “Regent replied that all cancellations must be made within 15 days of the effective date and offered a 90-day credit voucher. That was useless because cruise lines have suspended operations and government advisories are not to travel.”

Fortunately, we have contacts for Regent Seven Seas and AIG Insurance on this site.

He persisted. A few days later, my advocacy team got some good news.

“I am happy to report that AIG has just confirmed a full refund for my policy premium,” he reported.

That’s good news — something we could all use these days.

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Christopher Elliott

Christopher Elliott is the founder of Elliott Advocacy, a 501(c)(3) nonprofit organization that empowers consumers to solve their problems and helps those who can't. He's the author of numerous books on consumer advocacy and writes three nationally syndicated columns. He also publishes the Elliott Report, a news site for consumers, and Elliott Confidential, a critically acclaimed newsletter about customer service. If you have a consumer problem you can't solve, contact him directly through his advocacy website. You can also follow him on X, Facebook, and LinkedIn, or sign up for his daily newsletter.

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