If you’re planning to travel overseas when the international border re-opens next month, you may want to think again, as most travel insurance providers will not cover you for any claims related to COVID-19.
Throughout the pandemic, only one insurer has offered cover – but with borders closed, it related to exempted travellers only and didn’t cover COVID related claims.
Now even NIB has stopped issuing policies after their contract with underwriter AXA XL expired. They have suspended all insurance sales in Australia and New Zealand while they seek a new domestic and international underwriter that is cost effective and meets their future growth plans.
The move makes booking a holiday a gamble for Australians itching to take to the skies for holidays. Some countries, like Singapore, insist on travel insurance that will cover medical bills resulting from COVID-19.
Medical bills for treatment without insurance can amounts to tens of thousands of dollars.
Qantas, which is currently selling flights to places like Singapore, London and the US, provides insurance – but “a loss that arises from an epidemic, pandemic or World Health Organisation declaration of a public health emergency”.
Virgin Australia is also not selling COVID covering policies.
In a statement, the Insurance Council of Australia (ICA) said that many travel insurers are waiting on information related to the resumption of international travel before they start selling travel insurance again.
Once the government has confirmed the date the travel ban will be lifted, insurers will be able to make decisions related to their insurance products, which are an essential product for overseas travellers.
“Most travel insurance policies have exclusions for outbreaks of infectious diseases, pandemics, epidemics and/or known events and most travel insurance policies exclude cancellation costs arising from government travel bans as it is impossible for insurers to price the risk associated with border closures and travel bans.”
The ICA added; “Some insurers are offering a travel insurance product that gives international travellers some cover for COVID-19 related situations to countries that have had the Australian Government’s Do Not Travel alert lifted.
At this time, New Zealand is the only country that doesn’t have a Do Not Travel alert according to the Smart Traveller website.
The ICA expects travel insurance companies to start offering their travel insurance policies as the Do Not Travel alerts are lifted.
But it is expected to be expensive.
Comparison website, Finder revealed that Southern Cross Travel Insurance, American Express, Tick Travel and Zoom were only offering domestic travel insurance whilst World2cover, Fastcover, Cover-More were offering domestic and international travel insurance.
Of those, only Fastcover was offering some limited cover related to the COVID-19 pandemic and they were only offering insurance to Australia, New Zealand and limited countries on the Do Not Travel list. They are not offering any cover for anything related to COVID-19.
Medibank Travel Insurance is offering travel insurance within Australia and New Zealand; and limited cover for COVID-19. They are offering some cover related to overseas medical costs, pre-trip cancellation, on-trip cancellation and additional expenses.
They are not offering travel insurance for other international destinations on the Do Not Travel list or cover for government controlled border closures.
Bupa Travel Insurance has continued to sell travel insurance throughout the COVID-19 pandemic, however they are not providing cover for any country on the Do Not Travel list. They are also not covering anyone for any issues related to the COVID-19 pandemic.
Southern Cross Travel Insurance will cover you if you are diagnosed with COVID-19, however they will not cover you as a result of government restrictions, lockdowns or changes to quarantine-free travel according to their COVID-19 Cover statement.
The ICA could not give an indication on whether or not premiums would increase, saying that it would be up to each individual insurer.
It appears as though 1Cover may increase their insurance premiums, with their website saying;
“It is extremely difficult to assess the scale and cost of catastrophic global infection diseases like the Coronavirus. To include cover for events at a global scale could make travel insurance premiums unaffordable for the general public. However, we will continue to assess all claims on a case by case basis, even with the general exclusion in place.”
The effect is that 1Cover will not cover you for any claims related to COVID-19 regardless of when the travel was booked, or when you purchased your policy. All of their policies have a general exclusion policy in place for pandemics.
Consumer advocacy group CHOICE’s travel expert, Jodi Bird, expects more insurers will start selling policies again as travel borders open up, with some already starting.
He advised consumers to buy travel insurance at the same time that you pay for your trip because it will cover you for your trip before you leave, depending on the fine print of course.
“Don’t presume your travel insurance will cover you for cancellation due to border closures. CHOICE hasn’t come across any policies that will cover cancellation of a trip due to travel restrictions. You’ll need to ensure you have flexible cancellation conditions on any airlines and accommodation you’re booking.
CHOICE advised consumers to read the fine print before the pay for their insurance policy.
“It’s tempting to skip over the boring fine print when you’re excited about booking a trip, but there’s nothing worse than losing money on a trip that you had to cancel through no fault of your own. Read the travel insurance fine print to understand what you’re covered for and what’s excluded. If you’re unsure, ask the insurer.”
CHOICE was unable to comment on whether or not they thought travel insurance premiums would increase as there was no data available.
Finder Travel Expert, Angus Kidman says that despite insurance cover being limited, you may still be covered for medial expenses if you get COVID-19 while aboard. The right policy can also cover you for medical repatriation to Australia as well as trip cancellations unrelated to COVID.
He advises consumers not to cancel their trip if the travel date is approaching and the border remains closed. Cancelling the trip could count as a change of mind and you may not be able to get a refund or credit for flights that are subsequently cancelled due to restrictions.
Before you book, you should check the COVID-19 refund rules on the site you’re booking on and book directly with the airline or cruise company if possible. “Travel insurance policies won’t cover you for the most common reasons your trip could be affected by COVID-19. Unfortunately, that means you won’t be able to claim if you need to miss or cut short your holiday due to snap border closures.”
