En español | Most basic travel insurance plans are not likely to cover policyholders’ costs if they cancel planned travel to areas of the world affected by coronavirus — even though the Department of State has raised its global health advisory for U.S. citizens to Level 3, which means Americans should reconsider travel abroad because of the global impact of COVID-19, the respiratory disease caused by coronavirus. It noted that many countries are “taking action that may limit traveler mobility, including quarantines and border restrictions.”
And the Centers for Disease Control and Prevention has said that long flights and cruise ship travel remain inadvisable for older adults, who are more vulnerable to complications from COVID-19.
A typical travel insurance policy doesn’t cover a traveler’s decision to cancel due to trepidation about visiting areas hit with viral epidemics such as the coronavirus, Zika (the mosquito-borne virus that made headlines in 2016) or the SARS coronavirus scare in 2003, which began in China and later infected hundreds of Canadians — and scared off countless tourists — in the Toronto area. Standard plans don't provide for cancellation coverage for government imposed travel advisories or bans, either.
But if you get sick while you’re traveling, from the coronavirus or any other illness, most basic travel insurance plans include medical care and coverage if your sickness requires you to cut your trip short, as long as you bought your insurance before an epidemic has been declared. They also typically cover cancellation or interruption costs in the case of other unforeseen events, including terrorism, adverse weather events such as hurricanes, and natural disasters.
Some insurance companies explicitly state epidemics and pandemics as excluded reasons for canceling a trip.
Why? Because they’re hard to evaluate in terms of risk and cost. “Insurance is there to cover things where the risk can be assessed,” explains Henrik Romberg, chief commercial officer at Generali Global Assistance. “Pandemics or epidemics tend to be extremely unpredictable and have a very broad geographic impact. As a result, insurers really lack the proper tools and underwriting guidelines to properly price such risk.”
That said, contact your travel insurer to confirm; some insurers are making accommodations in certain cases. Allianz has said that “until further notice, although not covered under most plans,” it is accommodating claims for emergency medical care and emergency medical transportation for customers who becomes ill with COVID-19 while on their trip; trip cancellation and trip interruption if customers becomes ill with COVID-19 either before or during their trip; and “refundable, non-transferable trip cancellation expenses for customers who purchased their plan prior to January 22, 2020 for trip components in Mainland China, South Korea, or the Lombardy or Veneto regions of Italy and departing prior to April 1, 2020.”
"Cancel for any reason” coverage
The only way to be compensated when you need to change or cancel your trip to avoid a high-risk area during a viral outbreak is by purchasing a cancel for any reason (CFAR) benefit with your travel insurance w3policy. CFAR coverage usually adds about 50 percent to the price of a basic policy, which averages 4 percent to 10 percent of a trip’s cost, says Stan Sandberg, cofounder of TravelInsurance.com, a site for comparing and purchasing travel insurance policies. Older travelers, who may be more at risk of health issues, tend to pay at the higher end of that range.
There are eligibility requirements for CFAR coverage: You usually are required to buy it no more than 21 days after paying for your trip. You also can’t cancel any later than 48 hours before your departure, and will only be reimbursed up to 75 percent of your prepaid, nonrefundable trip cost, says Meghan Walch, product manager for InsureMyTrip, another site for comparing and buying travel insurance policies. (Note that states regulate the U.S. travel insurance industry, so policy options vary; New York, for instance, doesn’t allow the sale of CFAR insurance.)
If you haven’t bought insurance
As far as buying travel insurance now that you can use in canceling a trip because of the coronavirus outbreak, you may be out of luck unless you opt for a CFAR policy. The insurance industry considers the coronavirus, or 2019-nCoV, a “known” event, as of Jan. 22. Just as you can’t purchase insurance that would cover a trip disruption caused by an already named hurricane, once a virus is known, its presence is no longer an unforeseen event and there’s no related coverage.
“If you bought before it became a known event and you get sick, you will be covered,” Romberg notes.
If you didn’t buy travel insurance and want to cancel a trip abroad due to the disruptions caused by the current coronavirus outbreak, you may be in luck when it comes to your airfare, since many airlines are accommodating passengers’ changes and cancellations without penalty. (See a list of the major airline’s policies here.) Policies are evolving as the virus spreads, however, so check with your airline directly for details.
Editor's note: This story was originally published on January 29, 2020. It's been updated to reflect recent coronavirus developments.