COVID-19, originally known as the novel coronavirus before the World Health Organization named the disease in February, threw many travel plans into disarray.
People who bought travel insurance before the disease became a "known event" may be covered for medical expenses that arise from contracting the disease overseas, and may even be covered for cancellation expenses.
But people who bought travel insurance after COVID-19 was a known event may not be covered for medical or cancellation expenses relating to contracting the disease, or from changes to travel plans that result from quarantine measures, for example.
In this article, we look at what is meant by a "known event", reveal which insurers cover you for pandemics, and explain what you're covered for.
As of 18 March 2020, the Department of Foreign Affairs and Trade updated alert levels to "Do not travel" for all destinations. On 25 March, this was escalated to a travel ban.
If your travel insurance policy excludes cover for pandemics or epidemics, or you bought the policy after COVID-19 became a known event, then your travel insurance won't cover losses you've incurred as a result of coronavirus or the coronavirus travel bans.
Speak to your insurer before cancelling because if they won't cover cancellation, rearranging your holiday dates to a later time may be a more cost-effective option.
Insurance is intended to protect you against the unknown, so once an event becomes known, it's usually too late to buy insurance to cover you for that specific event.
When an event becomes 'known' is a grey area, but generally it's when it's publicised in the media or on official government websites. Insurers' definitions can vary, so check with your insurer on when they cut off cover for a specific event.
When did insurers cut off cover for the COVID-19 pandemic?
If you bought your travel insurance policy before the pandemic became a known event, there's a chance you'll be covered – depending on your policy. See our list of insurers that cover you for an epidemic or pandemic further down the article.
Insurers that do cover an epidemic or pandemic cut off cover for claims resulting from COVID-19 from around 21 January 2020 for travel to China, and 31 January for travel worldwide.
However in a recent dispute ruling, the Australian Financial Complaints Authority (AFCA), which is the external ombudsman for the insurance industry, stated that the insurer couldn't rely on articles published on a website.
AFCA also said that the 'known event' exclusion in the insurers policy related to whether the policyholder was aware of the COVID-19 event and if any potential claims could arise from it.
So even though the insurer, Mitsui Sumitomo (provider of InsureandGo and Tick Travel Insurance), sought to deny that person's claim because they deemed it a known event, AFCA directed them to pay the claim.
Below are the COVID-19 cut-off dates that some insurers listed on their websites. But if your insurer has denied your claim because they deemed COVID-19 a known event, it's worth lodging a dispute with your travel insurer.
If you don't get a satisfactory outcome, escalate your dispute to AFCA.
|Brand||Cut off cover to China||Cut off cover worldwide|
|InsureandGo||21 January||31 January|
|Good2Go||24 January||24 January|
|Travel Insurance Direct||23 January||31 January|
Many, but not all, travel insurers cover pandemics or epidemics, as long as you bought the policy before it became a known event. Cover will vary between policies.
If you bought your policy before COVID-19 was a known event, and your policy covers medical expenses as a result of a pandemic, you will be covered for medical expenses if for example, you contracted coronavirus on your travels.
Many travel insurers cover medical expenses in a pandemic, but you're more likely to need cover for cancellation expenses – for example, after the government changed the travel advice for your destination to 'Do not travel'.
If your policy covers cancellation expenses, you will be covered to cancel or possibly amend your travel arrangements to avoid the affected area. Check with your travel insurer specifically to find out what they'll cover here, because it can be tricky.
Pandemic or epidemic?
An epidemic is an outbreak of disease that happens in a wide geographic location and affects a lot of people. A pandemic is an epidemic that has spread throughout a whole country or across continents.
Travel insurers tend to exclude or cover both pandemics and epidemics. So if you're reading the terms and conditions, you can scan for either of these words to check if you're covered.
Several travel insurers are allowing people to reschedule their travel insurance or cancel and claim a credit toward a future premium. So ask your travel insurer what they can do for you.
Travel insurance policies have a 14-day cooling off period. If you change your mind in this period, you can cancel your policy and get your money back from the insurer.
Otherwise, some insurers may decline to refund, reschedule or provide a credit for unused travel insurance premiums.
However AFCA considers a credit or refund of your premium a fair outcome where:
- you got a refund or credit from all of your travel providers, so there's nothing left to claim on your travel insurance
- your travel insurance policy has a COVID-19 related exclusion that prevents you from claiming on the policy.
So if your travel insurer has knocked back your request for a credit or refund, lodge an internal dispute with the insurer, noting AFCA's stated approach. If they still refuse, escalate a complaint to AFCA.
If you didn't purchase a policy by 31 January 2020, it's unlikely you'll get travel insurance that covers claims resulting from coronavirus since it was deemed a known event.
Most travel insurers also suspended policy sales in response to the Australian Government's international travel ban.
International travel insurance for COVID-19
The only insurer we're aware of that currently sells international travel insurance is Cover-More. However it will not cover COVID-19 related claims, and you will need a government exemption to travel overseas.
If you're unable to get cover for coronavirus now but you still plan to travel, you should get travel insurance to protect you from events not related to COVID-19.
Domestic travel insurance for COVID-19
With international borders shut but internal borders starting to open up, Australians will likely look to travel at home this summer.
There are several insurers selling domestic travel insurance, however it's unlikely to cover you for COVID-19 or travel bans related to COVID-19.
Your travel insurer declined your COVID-19 claim, what next?
Read your travel insurance Product Disclosure Statement. In the first instance, it's up to you as the policyholder to establish that you have a valid claim under the policy terms and conditions. That generally means handing in lots of documentation.
Then it's up to the insurer to decide if your claim is valid and there's no policy exclusions that should be applied.
If you disagree with the insurers decision regarding your claim, raise a complaint via their internal dispute resolution service.
If you don't get a satisfactory result from the insurers internal dispute resolution, escalate your complaint to AFCA.
Some insurers are very good at producing policy fine print to deny your claim, but in the context of COVID-19 travel insurance, AFCA have stated they will also take into account the relevant legislation which states:
"Insurer may not refuse to pay claims in certain circumstances...where:
(a) the act was necessary to protect the safety of a person or to preserve property; or
(b) it was not reasonably possible for the insured or other person not to do the act;
the insurer may not refuse to pay the claim by reason only of the act."
Getting your money back on flights in a pandemic
If the airline has cancelled or delayed flights due to a pandemic, it's considered an event that is out of their control and the airline will have a policy providing compensation for cancellation or delay.
Familiarise yourself with the policy in case you need to remind the airline of their terms and conditions, because they won't necessarily volunteer the information to you.
For the policies of Australian domestic airlines, read our advice on coronavirus flight refunds.
Getting your money back on accommodation in a pandemic
Your rights for accommodation bookings are covered by Australian Consumer Law and you have access to consumer guarantees, the same as for any other goods or services.
Booking sites generally have their own terms and conditions and if you used a booking site, you should deal with them, not the end-point service provider. The booking site should still be subject to Australian Consumer Law.
If you booked accommodation through a third-party provider like Airbnb or Booking.com, persist with your cancellation via that third party, since it's unlikely you'll be able to enforce the Australian Consumer Law on the overseas accommodation provider.
If you paid by credit or Visa/MasterCard debit card, you also have a right to credit card chargeback if the accommodation provider hasn't provided the service.
The sites usually have standard cancellation policies, but in the event of emergencies like pandemics, they may make an exception.
Airbnb, for example, may waive cancellation penalties for bookings made on or before 14 March. So familiarise yourself with the booking site's policy and quote it to them if necessary.
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