Travel insurance became a more critical part of plans during the COVID-19 pandemic but with many restrictions related to travel eliminated, trip cancellation and trip interruption insurance coverage are still more important than ever, particularly with the number of flight delays and cancellations we've been seeing.
“What's come out of this pandemic…is the popularity of two new insurance products that were always there but not necessarily of interest to many, and that is now trip cancellation and interruption,” Martin Firestone, President of Travel Secure Inc. told Yahoo Canada. “The reason is because of all the issues going on out there with flight delays and cancelled flights, lost baggage and all those sorts of things.”
“Insurance is playing a key role here, at least you know you have a policy, you have a claim number and you can claim with the insurance company for costs incurred, a lost bag ... You’re allowed up to $900 per person for essentials, and things like that … People now realize you can't depend on the airline to compensate you or get your money back, so insurance takes on a whole new perspective.”
How are COVID-19 issues handled through travel insurance?
While previously, travellers had to look out for a COVID-19 rider, or a cap on expenses related to COVID-19, that isn’t the case anymore, with insurers treating it as “any other unexpected medical emergency," according to Firestone.
“You should know that they don't see the risk that they once saw,...way back when we talked COVID you ended up in an emergency room, in a hospital, on a ventilator, and in some cases, in the U.S., that could be half a million dollars racked up very quickly,” he said. “So hence the reason why they said if you want protection for COVID, you need to buy an additional policy that covers you.”
But there are still a few things to keep in mind in terms of what is actually an acceptable claim related to COVID-19.
“COVID is a known cause when it comes to cancellation insurance, meaning you can cancel your trip if you get COVID within the 14 days leading up to it, so that is an acceptable claimable reason, I came down with COVID I can't go,” Firestone explained. “However, nothing else will be covered with respect to COVID.”
“You aren't going to be able to submit a claim and say, the country I'm going to has got another wave and it's just so bad I don't want to go, not an answer. The country we're going to, they closed the border I can't get there, not covered. Our country, Canada, has issued a Level 3 or 4 advisory for COVID, not covered. So it's very important…to understand that the only covered reason on a trip cancellation claim, with respect to COVID, is if in fact you got it.”
Once a traveller leaves for their trips, that no longer falls under the cancellation part of the policy, that falls under interruption.
“If you were to get COVID on that trip,...interruption still will cover accommodations, expenses and new airfare back home, if you missed your flight,” Firestone said.
What should travellers look for in a travel insurance policy?
Firestone stresses that when travellers are looking for travel insurance, it’s critically important to really understand the specifics of the policy, including getting information from professional brokers, as unforeseen travel issues are of top concern.
“They just have to be very knowledgeable, there's a lot of fine print, there's a lot of things they have to understand when they buy it,” Firestone said. “It's not just as simple as clicking a button now on the Expedias of the world and say, I'll take the insurance,...I think you have to understand what you're getting and what's covered, and what's not covered.”
“If you just wait to claim time and then you get a nice letter back from [the insurer] that suggests that this is not covered, then you're going to be frustrated.”
Firestone also highlights that trip cancellation and interruption, which is often a package, are “paramount” for travel planning, amplified as we continue to hear horror stories of travellers being stranded without a flight home.
“You never know if the flight gets delayed, you never know if you’ll miss it, and the problem with the airlines, as we all know now, is the compensation is a bit of a joke,” Firestone said. “They're just sort of arguing whether it was a safety issue and staffing, and therefore it's not their responsibility, therefore they don't have to pay the claim.”
“With cancellation…you declare the amount that you will be able to present at claim time that shows 100 per cent, non-refundable amounts that you paid, that the end user said, if you can't get here you're going to be responsible for or we're not giving you back any of your money, that's the key… I think the new world has in it people, when they travel now, not only looking for emergency medical but also cancellation and interruption, also baggage for that matter too.”
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