Travel in the New Normal, Part 3: The Importance of Purchasing Travel Insurance
Updated: Dec 1, 2020
This is part 3 of our 4-part series on traveling in the new normal. To start with part 1, click here.
We are all navigating new terrain when it comes to traveling in the midst of a global pandemic. Even when the number of COVID cases flatten and decline in many places around the world, travel is still certain to look very different moving forward to prevent (as much as possible) any new “spike” in cases.
In part 1 and part 2 of this series, we spoke of how difficult it is to predict travel right now - even for us, travel professionals. There is so much that changes daily in both international and US travel. Countries around the world have closed, opened, re-closed, and reopened borders many times. This has left travelers more than cautious about venturing into any type of travel, especially international. Travel is seen by some as too risky of an investment right now.
Before the pandemic, we have always suggested that our clients consider purchasing even a basic level of travel insurance to protect their investment from emergencies or unforeseen events that could happen before or during a trip. For a long time, it may have been considered an easy opt-out for most. (Think about it...how many times have we pressed, “no” on the “add insurance to your trip for $xx” button? Guilty!) But now, we’re not taking those risks. And we don’t recommend that our travelers do either.
Let’s look at what travelers should know about travel insurance during the pandemic. We believe that it is important to be as informed as possible when traveling in this new normal.
Protecting your investment
Even before COVID, there were still a flurry of things that could go wrong before a trip. We read this example in a travel article the other day,
Let’s say you pay $7,000 for a once-in-a-lifetime luxury cruise around the Mediterranean for your 25th wedding anniversary. The day before sailing, your mother suffers a serious fall and ends up in the hospital. When you call the cruise line and explain what happened, they’re sympathetic — but you’re not getting your money back. Company policy clearly states that there are no refunds if you cancel within 14 days of departure.
And it’s true! It’s the things we don’t think about that travel insurance companies have thought about. A cruise line, tour operator or vacation supplier are not going to budge on their terms and conditions that a traveler willingly signed simply because someone got sick or your house burned down. This means that you could lose part of or all of your money, depending on the booking’s policies. It’s unfortunate, but true, which is why travel insurance exists.
Now, we are seeing that most international destinations that are open to travelers are requiring a negative COVID-19 test within a few days before traveling to their country. What happens if your test comes back positive? You are now so close to your travel date that the likelihood of getting any money back from your investment is not very high.
Does travel insurance cover a COVID diagnosis?
First of all, we have to cover our rear-ends ;) and say that we are not licensed insurance agents. We always advise our clients to completely read and understand the terms and conditions of their travel insurance policies. And we can point our clients to the right people to call when they have questions that we can’t answer.
That being said…we have spoken with our travel insurance providers on multiple occasions to gain understanding on how to protect our clients’ trips.
So, does travel insurance cover a COVID-19 diagnosis? Good news...YES! At the start of the pandemic, there was question on whether or not travel insurance would expand to cover a COVID diagnosis. We spoke with our preferred insurance suppliers, and they confirmed that a trip would be protected by even their most basic of travel insurance plans if a traveler received a positive COVID test. It simply needs to be documented by a medical professional as any other illness would. They also said that if a close family member were to contract COVID, just as any other illness, that reason for cancellation would be covered as well. By our preferred suppliers, COVID is being treated like any other illness.
We’ll say it again...If your travel insurance policy covers unexpected illness, then COVID-19 is included. The insurance company would cover, for instance, if the traveler received a positive result on their pre-travel COVID test and they could not travel (if it’s properly documented). As much as we’d hope that wouldn’t be the case for anyone, it certainly could happen, and if it does, we want our clients’ investments to be protected.
To be clear - insurance would not cover the cancellation of a trip if a traveler was simply uncomfortable going because they heard of a spike in the number of COVID cases in their travel destination. Because COVID is an already-declared pandemic, that is something to consider before booking.
It is also important to note that most travel insurance coverages do not expand to cover governmental prohibitions. This means that trip cancellation costs would not be covered if the borders of a destination were to re-close in light of the pandemic, or if a host of your tour, hotel or travel vendor cancels due to COVID concerns. But we spoke with a representative from Chubb, one of our preferred suppliers. What we found out was reassuring…
If a trip is canceled by a supplier (i.e. cruise line) and a full refund is given, the traveler may apply to have their insurance premiums refunded as well!
If a trip credit is given for future travel, the travel insurance policy can be re-dated for travel dates within two years!
What a relief! We really can protect our clients.
We also have some insurance providers that still offer “cancel for any reason” (CFAR) coverage. These more expensive policies can sometimes cover up to 75% of your travel costs. It is a good option to have if you’re particularly unsure.
Can I afford travel insurance?
Thankfully, travel insurance suppliers provide many options for every type of traveler at a variety of price points. The quotes are based on the age of the traveler and the cost of the trip that is being covered. There are even annual travel plans (also called multi-trip plans) that travelers can purchase if they travel often. GlobeSage actually has access to four different travel insurance providers, including Chubb, which is who we primarily quote. To see an example of Chubb’s various policy coverages, view their comparison chart for single-trip plans and for multi-trip annual plans. These will give a general idea of what to expect when deciding which travel insurance plan is right for you.
You may have many more questions that we didn’t cover in this article. (We get it! There’s a lot to think about.) Though we don’t know everything there is to know about travel insurance, we do work closely with those who do. Even if we can’t answer your questions straightaway, we will work on getting a reliable answer for you from the right sources. Click here to schedule a free consultation to chat through your options.
Travel insurance is an important topic in this new normal. Next time, we will look at the necessity of working with the right travel companies/suppliers. The companies we work with are making their guests’ safety their top priority and are adjusting their cancellation and change policies to accommodate this crazy season that we are all in.
Together, we’ll get through this and continue to make amazing memories!
More from this Series:
Part 1: Navigating Future Travels