Travel insurance for pandemics and how your travel can be affected by pandemics and epidemics
The SARS-CoV-2 virus that caused the COVID-19 Coronavirus pandemic affected the entire world in ways almost none of us had experienced before. The novel coronavirus had a significant impact on international and domestic travel including flights and cruising. This sudden impact is also expected to have lasting, possibly even permanent changes to the way we travel, in the same way the September 11 terrorist attacks had a permanent impact on airline security measures.
Travel insurance Product Disclosure Statements (PDS) usually refer to epidemics or pandemics in their general exclusions. However, before we discuss how pandemics and epidemics can affect your travel insurance, we should firstly establish the definitions of travel insurance epidemics, pandemics and general exclusions.
An epidemic is a disease that affects a significant proportion of an area, community or region. In the PDS for Fast Cover, an Epidemic is defined as "a sudden development and rapid spreading of a contagious disease in a region where it developed in a simply endemic state or within a previously unscathed community."
A pandemic is a disease outbreak across a wide, or multiple geographic locations such as countries or continents and has an effect on a large amount of the population. Within the Fast Cover PDS, a Pandemic is defined as "a geographically widespread outbreak of an infectious disease that causes serious illness in humans."
COVID-19 was an epidemic when it was limited to Wuhan, China. When the virus spread to other geographical regions, it became a pandemic.
In general terms, a pandemic is a large-scale version of an epidemic, or a travelling epidemic.
A PDS contains exclusions specific to a particular benefit. That is, certain situations and circumstances are not able to be covered for that benefit.
General exclusions are classified separately from the different benefit sections because they apply across all sections of the policy, and they apply regardless of when you bought your policy. This means that even if the event, activity, or situation had not started yet, or was not a known event at the time you purchased your policy, you will still not be covered for that event, activity or situation.
The terms, conditions and exclusions in the PDS will be different between travel insurers.
You should check the relevant PDS to find out if pandemics are covered. If there is a general exclusion for a pandemic, then there is no cover for any claims (eg medical and trip cancellations) related to a pandemic.
Epidemics are often excluded from being covered by travel insurance policies. This means any claims (eg medical and trip cancellations) related to an epidemic would not be covered due to the epidemic travel insurance general exclusion.
Insurance is based on the chances of something unexpected happening to only a portion of the people insured by a company. Modelling by actuaries makes a prediction that only a percentage of people will likely have to make a claim, such as having to cancel their holiday due to illness or injury. Based on this prediction, every traveller is charged much less than the actual cost of the cancellation of their trip, but charged enough so there is enough money in reserve to pay for the unfortunate ones who have to cancel their trip due to illness or injury.
However, as demonstrated with the COVID-19 Coronavirus, the implications of Pandemics can rapidly change and escalate in a very short period of time. Pandemics spread across many geographic areas and affects many people, resulting in a much higher percentage of people being affected and needing to make claims than other unexpected events (for example, earthquakes and other natural disasters). This means that the money each individual is charged may not be enough to cover the cost of all the claims.
To manage such a situation, there are two options for travel insurance companies. The first is to have a General Exclusion for Pandemics and Epidemics in a travel insurance policy, or the second option, which is to substantially increase the price of travel insurance all the time, so that if there is a Pandemic or epidemic in the future, there will be enough money in reserve to cover the costs of all claims.
The government has 4 levels of travel advice which they provide for each country with level 1 being the least risky and level 4 being the riskiest.
Travellers should follow the advice of DFAT (Department of Foreign Affairs and Trade), as this can keep you safe, and may affect any claims that you may make. You can monitor the Australian Government Overall Travel Advice by downloading the Smartraveller app and monitoring the Smartraveller website.
A travel ban is imposed by the Australian Government, and forbids any overseas travel by Australians (with a few exceptions, for example, if your usual place of residence is overseas, you would be allowed to return home).
On 24th March 2020, under the Biosecurity Act 2015, the Australian Government issued a travel ban in relation to the COVID-19 Coronavirus pandemic that prevented all Australians travelling overseas. The Overall Advice Level for all countries outside of Australia was raised to Level 4 Do Not Travel.
If you still choose to stay in, or travel to, a country or region with this type of travel advice, you are doing so at your own risk.
Some things that you should do and know are:
A pandemic or epidemic may mean a travel provider will cancel parts or all of your trip, or you may be required to cut short or cancel your trip as a result of following the Australian Government’s travel advice. This could result in a number of expenses that may or may not be covered by travel insurance which you should consider:
Every travel insurance company is different. You should read the relevant PDS for your policy or for any policy you are considering purchasing.
You should pay particular attention to any reference to pandemics, epidemics and government travel warnings in the General Exclusion section of the PDS.
Pandemics are often listed as a General Exclusion in the PDS of insurance policies. If a pandemic is excluded from cover in the PDS for your policy, there is no cover for the pandemic regardless of:
Regardless of your reason for travel, and whether or not you have special clearance to leave Australia and enter another country, if your travel insurance policy has a general exclusion for pandemics, you will not have cover for any claims related to the pandemic.
You should refer to the PDS and contact your travel insurance company if you are unsure about your cover.
Travel insurance policies offer a 14 day cooling off period where you can get a full refund if you have not exercised any right under your policy, such as making a claim or your policy has started. After this time, it is up to the individual travel insurance company whether they will offer you a credit, a refund or nothing.
If you have not departed for your trip, you may not feel like you have used your travel insurance policy - but if your policy has the cancellation benefit, you actually have been! Your policy could have actually been covering you for weeks or months for potential unexpected cancellation (like illness or injury), depending on how many weeks prior to your departure date you purchased the policy.
For example, if you had an accident and broke your leg and you had to cancel your trip, you would have provision to claim for this. Therefore, your request for a refund may be declined as you have actually been using your policy or you may be offered a lesser amount of what you have paid, to account for what you have used of the policy.
No. There are 3 reasons why you cannot get COVID-19 travel insurance cover.
If your travel insurance policy has a general exclusion for pandemics and epidemics, medical claims not directly or indirectly related to a pandemic or epidemic can be submitted to your travel insurance provider for consideration.
However, if you still choose to travel during a pandemic or epidemic, you are doing so at your own risk. While your travel insurance company may wish to seek assistance for you, they would still be relying on the local medical staff, who may not be available! For example: if you are injured and present yourself to hospital, you may not get the attention you need, as the hospital system may be overstretched trying to cope with pandemic patients.
Claims are usually assessed on a case-by-case, in accordance with the terms, conditions and exclusions of your policy and will depend on your particular situation. This includes also taking into account whether you travelled against government advice, and whether you took care to keep yourself safe.
There are a few travel insurance companies who are still able to sell policies, while many suspended sales once the Australian Government’s travel ban came into place.
However, of the companies who are able to sell policies, there may be a restriction on when a policy can start.
When you are planning a trip and buying travel insurance, you should consider:
General Exclusions are listed in the PDS and they are usually near the rear of a PDS.
No, pandemic and epidemic general exclusions have not just been introduced to policies since COVID-19 appeared. When you buy a policy, there will always be a PDS applicable to your policy at that time, and it will have an effective date for when it was released. The benefits, terms, conditions and general exclusions will be stated in that PDS, and the Claims team will assess any claims you make with reference to the specific PDS which applies to your policy.
Historically, pandemic general exclusions have been added over the years to insurance PDSs since the impact of the 2002 SARS epidemic in Asia.
If your trip has been affected by COVID-19 and you want to change your departure and/or return dates, log into Your Policy or contact us.
You will need to make changes to your departure date before your trip starts (this is the Depart date that you selected when you purchased your policy) and your return date before your policy ends (this is the Return date that you selected when you purchased your policy). You cannot change your Depart date or Return date after they have occurred.
Please note, there may be an additional charge depending on your new travel dates.
Please refer to Product Disclosure Statement for full terms and conditions and exclusions and limits that apply.
Travel providers have been much more flexible and helpful during the pandemic if travellers are unable to travel, especially due to COVID-19. If you need to cancel or reschedule you trip, you should firstly contact your travel agent and/or travel providers (airline, cruise line, accommodation, tour company…) and see if they can reschedule your trip or provide a refund, credit or travel voucher.
If after contacting your travel providers, you have out-of-pocket expenses, you can make a claim for COVID-19 trip cancellation. Please note there is no cover for COVID-19 cancellation or trip disruption expenses on a Basics policy.
If you are rescheduling your trip and want to change your depart and/or return dates on your travel insurance policy, log into Your Policy or contact us.
There is only cover for COVID-19 related claims if you purchased your policy after the 10th February 2022, unless you purchased the optional COVID-19 Pack and it appears on your Certificate of Insurance. Cover is subject to the policy terms, conditions, limits and exclusions in the Product Disclosure Statement (PDS).
Travelling at the moment has some added complexities that didn’t exist prior to this pandemic. We would highly recommend you keep up to date with the Smartraveller advice, as well as any advice in the country in which you are travelling. If you find yourself stuck overseas, contact our Claims Team and we may have some options to discuss with you.
You purchased a policy after the 10th February 2022
There is some cover for COVID-19 related claims for:
Check the Product Disclosure Statement (PDS) for more information.
You purchased the Optional COVID-19 Pack before the 10th February 2022
There is some cover for COVID-19 related claims for:
Check the Product Disclosure Statement (PDS) and the Optional COVID-19 Pack Document for more information if the Optional COVID-19 Pack is suitable for you.
You purchased a policy before 10th February 2022 and you do NOT have the Optional COVID-19 Pack:
There is no cover for any claims that are directly or indirectly related to or arising from the SARS-CoV-2 virus, the COVID-19 disease or any mutation of either. This applies regardless of when you buy your policy, your travel destination, or the Australian government’s travel advisory for the country at the time you bought your policy.
Whether or not you have the Optional COVID-19 Pack, there is still cover for other claims which are not related to COVID-19. You can make a claim online 24/7 and our Claims Team will assist you. All claims will be assessed on a case-by-case basis and in accordance with the terms, conditions and exclusions of your policy.
^ Price as at 27/10/2024 compared to the price calculated today for this policy.
* See Product Disclosure Statement for full terms and conditions and exclusions and limits that apply.