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Covid-19 and travel insurance: Your questions answered

Travel in the coronavirus era? It's complicated. (Image: Getty)

Many Australians booked overseas and domestic travel before and just after the coronavirus shut down such activities.

If you're one of the people affected, will travel insurance help you? You paid to be covered for cancellations, so shouldn't they come to the party?

Or are those policies not worth the paper they're written on? 

Flight comparison site Skyscanner's regulatory affairs senior director Martin Nolan has answered the most common questions from stressed travellers:

Will travel insurance pay out for coronavirus cancellations?

The answer to this depends on timing.

"If you bought a travel insurance policy before coronavirus became a known event, then generally speaking – yes – you will be covered," said Nolan.

"Travel insurance will not generally cover cancellations for trips booked after coronavirus became a known event unless they’ve explicitly covered this risk – and most have not."

While each insurer will have set its own cut-off date, March 12 is a good guide, as that's when the World Health Organisation officially declared the coronavirus as a pandemic.

"So if you took out your policy on or after March 12th, it’s likely not covered," Nolan said.

"You should check your travel insurance provider’s website, your policy documents or give them a call to find out more."

Can I cancel travel insurance if I can’t (or won't) travel?

So you bought a policy before the pandemic – and have now decided you can't do the trip.

You can save some money by cancelling the travel insurance and receiving a refund.

"You should be able to cancel your policy," said Nolan.

"Check with your provider, as some may have instituted cut-off dates for refunds, or may have specific rules surrounding coronavirus cancellations, like pro-rata refunds."

The big rule to remember is that insurance can only be cancelled if there has been no claim made.

So if you're eligible for a flight or accommodation cancellation payout, then you'll have to analyse whether it's better to claim or better to cancel the insurance.

"Consider whether you plan to book future travel, too, as getting new travel insurance coverage in the current climate is much more difficult," Nolan said.

"You can also usually cancel an insurance policy within 14 days of having taken the policy out, so if you’ve only just taken out the policy, this is worth considering."

Will travel insurance cover the coronavirus if I buy it now?

"Highly unlikely," said Nolan, as travellers are now embarking on trips fully aware of the risks.

"Insurance providers are no longer offering coverage once coronavirus became a known event," he said.

"Many governments are still advising against travel to certain destinations, and insurance providers are therefore taking the lead from these official travel advisories."

How do I check if my travel insurance has changed due to the coronavirus?

Nolan said that most insurance providers have been updating their customers on how the virus epidemic has affected future travel.

"Check official websites for policy changes or contact your provider for details," he said.

"Certain existing policies may also now have stricter cut-off dates in which you can claim compensation for a cancelled trip, so don’t delay in making a claim."

If any terms have changed, the insurance provider should have proactively contacted policyholders. 

"Make sure you check your email spam folders too, just in case," Nolan said.

What if I still go on my trip to a coronavirus-affected area?

The coronavirus has touched most of the globe, so the chances are the country that you booked is now a no-go zone.

But if you decide you don't want to cancel the trip and you still go, the insurance will likely not cover you.

"Generally, it won't – unless you were already there at the time of the pandemic," said Nolan.

"If you took out your insurance after coronavirus became a known event, it’s unlikely to be covered… If you already had a policy in place, for example an annual policy, but you only booked your trip after coronavirus became a known event, it’s also not likely to be covered."

The insurance policy would likely be deemed invalid if you head to an affected part of the world, especially so if you later make a claim that's coronavirus-related.

"Be sure to also monitor your government advice on sites such as Smart Traveller, as some policies follow official government advice," Nolan said.

"Any additional warnings or restrictions issued usually operate as a trigger for insurance policies to let you make a claim, in many cases even where airlines haven’t cancelled your flight yet."

Conversely, if you cancel a trip to a destination that's doesn't have a government warning against it, the act would be considered voluntary.

"And your insurer would be unlikely to cover it."

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