Travel Insurance and the Corona Virus
People purchase travel insurance to protect an investment in a trip in case it needs to be cancelled. The Corona virus taught travelers that most travel insurance policies do not protect them in the event of a pandemic. It also rudely surprised other travelers that most policies do not protect a traveler if a tour operator goes bankrupt and does not refund money travelers have paid to those travel suppliers who are bankrupt. Bankruptcies have been common in the travel industry because of COVID 19.
Here are some tips from The Traveling Professor in terms of travel insurance and the Corona virus:
Most Standard Policies Do Not Cover Pandemics, Including Corona Virus: If travel plans are affected by COVID-19, any losses will probably not be covered. So, if a trip is booked with hotels, flights, tours, etc. and the traveler cannot go on that trip, any unreimbursed expenses cannot be recovered by travel insurance. However, if a trip was cancelled by a tour operator or other supplier prior to the day COVID-19 was declared a pandemic (it was declared a pandemic on March 11, 2020 by the World Health Organization), travelers can probably have a good chance of being reimbursed by the insurance company. Going forward, when purchasing travel insurance, check with the insurer to see exactly what is covered and what is not covered.
Transferring a Travel Insurance Policy to Another Trip: Many standard travel insurance policies permit the policy holder to transfer their policy to a future trip. If a trip was cancelled this summer for instance, and the traveler had travel insurance, they may be able to transfer that policy to a future trip.
Cancel for Any Reason Travel Insurance Policies: Like its name implies, these policies provide reimbursement when a traveler cancels for any reason. However, most of them will only provide limited reimbursement, perhaps 50% or 75% and are costlier than standard policies. Watch out! Many insurance companies may now limit their liability from pandemics even though they call their policies "Cancel for any Reason". Check with the insurance company before purchasing.
Use Credit Card Insurance: Some premium credit cards provide travel insurance at reduced rates or for "free". Some have more liberal refund/reimbursement policies.
What if Travel Insurance Provides No Reimbursement: In the case of a cancellation by a travel provider, if you purchased travel with a credit card, the credit card company may provide the traveler with relief. This is usually the traveler's last resort in getting compensated.
Travel Insurance Does Not Provide Reimbursement if The Traveler "Does Not Feel Comfortable" Traveling: Let's say the traveler has an upcoming trip to an open country (Aruba is one example) but they just don't feel comfortable traveling. The hotel has not cancelled, the airline has not cancelled and there are no travel restrictions. The traveler is probably not due reimbursement by the insurance company in this case.
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