UPDATED: Implications For Travel Insurance As The Coronavirus Pandemic Ravages The Travel Industry

The Covid-19 coronavirus outbreak has caused a global health emergency of proportions unseen in the recent past. After many advisories, measured statements, and reassessments, the World Health Organization has finally declared the coronavirus a pandemic. A 13-fold increase in reported cases outside China seems to have forced the one declaration the WHO had hoped to avoid.



Coronaviruses are spread between animals and people. This current strain that is code-named Covid-19 has previously not been identified. It has respiratory symptoms, like flu, fever, shortness of breath, and breathing difficulties. In more extreme cases, it can cause pneumonia, kidney failure, and death.


The coronavirus has spread rapidly across Asia and has now sickened tens of thousands and killed nearly 5,000 people since it was first discovered in the Chinese city of Wuhan in late 2019. Outside China and Asia, Italy and Iran have been two of the hardest-hit countries. As well as the massive strain it has put on health systems, the epidemic has disrupted supply chains and checked economic growth in China and elsewhere. 


But perhaps the most affected has been the travel industry, where thousands of flights have been canceled and travel bans and restrictions have put airlines on red alert. International conferences, exhibitions, and trade shows that draw tens of thousands of visitors have been canceled. Should a pandemic be declared, travel-related revenue losses from China alone could top $73 billion. Millions of jobs are already on the line.


The travel insurance industry has, predictably, not been spared. In fact, this coronavirus epidemic has put the importance and reliability of travel insurance in sharp focus:

How the Coronavirus Outbreak Has Caused Chaos for Travel Insurance



As coronavirus fears escalate, many Canadians are canceling their planned overseas holidays. Major airlines have all registered big slumps in bookings. Air Canada is among many major airlines that have canceled flights to China.


While the Canadian government has not issued any official travel ban over the Covid-19 epidemic, it has active travel health notices that warn citizens of the possible health risks of traveling to coronavirus-hit countries such as China, Singapore, Italy, South Korea, Hong Kong, Iran, and Japan. 


While canceling travel to the hardest-hit countries is the most sensible precaution, the anxiety for many is on whether their travel insurance policy will cover the air ticket and other things they had already paid for. 


The Telegraph estimates that only 9 percent of travel insurance policies will pay out if policyholders canceled their trips due to fears of catching the deadly virus. The reason is that most travel insurance policies do not cover trip cancellations. This becomes a big problem if you had all along thought that your policy has broad enough cover.


If you are planning an overseas trip or had already planned one, even to countries that have not yet been affected by Covid-19, you may now need to carefully consider your travel insurance options:

What You Need To Know About Coronavirus And Travel Insurance



What has emerged in the wake of the coronavirus outbreak is that many travel insurance plans exclude coverage for costs related to trip cancellations.


Several insurance companies have also updated their terms effective March 10 when the WHO declared coronavirus a pandemic. 


For example, GMS Insurance specifically state that any trip cancellation to any country where the Canadian government has active travel advisories over Covid-19 fears will not be covered. This includes even countries, like South Korea, where the travel advisory is only restricted to a specific region.


What this means is if you decide against taking a trip you had already paid for over coronavirus fears, your travel insurance plan will likely not extend any cashback.


Even if you are on a premium plan that includes a broad range of coverages, as long as you don’t check off the ‘cancel for any reason’ CFAR option, your policy may be no good if you cancel your trip. In the case of GMS Insurance’s TravelStar policy, if you had purchased your trip cancellation before a regional or countrywide travel advisory was issued, you will still be covered if you decided against proceeding with your trip over Covid-19 risks.


Travel insurance policies tend to cover trip cancellation for unforeseen specified risks, like trip cancellation because of sickness. They typically don’t cover trip cancellation over fears of what everyone now know might happen on the trip. If you want the luxury of canceling your trip because you just don’t feel right about proceeding with the trip you will need to buy extra coverage by opting in the CFAR option.


During times of great uncertainty like these, travel companies may be more open to requests to rebook flights. Many airlines have waived change fees and some cruise lines have given full refunds, even where terms didn’t expressly promise they would. So, outside what your travel insurance policy may or may not cover, there could still be ways of avoiding a total loss.


Otherwise, without ensuring that your travel insurance policy has extra coverage for trip cancellations ‘for any reason’ you would lose the money you prepaid for air tickets, hotel stays, and car hires.

Some Travel Insurance Policies Exclude Coverage For Epidemics And Pandemics



It seems reading the fine print when buying travel insurance is more important now than it has ever been. Essentially, if you bought your policy thinking that it would cover cancellations over a deadly virus breaking out somewhere in the world and didn’t think to check for any exclusions for epidemics and pandemics, you would not be covered if you canceled your trip to Macau over coronavirus fears.


Note here, while there are no specific travel insurance exclusions for coronaviruses, there are policies that exclude coverage for risks related to epidemics and pandemics. Just as there are policies that exclude coverage for pre-existing conditions.


The coronavirus outbreak is now a pandemic, which is defined as a major disease outbreak that spreads rapidly in different countries at the same time.


The reason why some policies exclude coverage for epidemics and pandemics is travel insurance generally covers unexpected events. In this case, the coronavirus outbreak and its health risks are now well known. The risk of contracting the disease if you traveled to China, Hong Kong, Italy, and the other acutely affected countries where entire towns are on lockdown should be fully expected by any traveler who reads and watches the news.

What Travel Insurance Will Still Cover In spite Of Coronavirus


A common question travelers are asking is what happens if a coronavirus travel advisory is issued after you had already made the trip? Will you still be covered for emergency medical care?


As a general guide, if a travel health advisory is issued after you have already arrived in the affected country or region, you would still enjoy coverage for emergency medical care. But if you arrived there with the travel advisory already in place, some insurers may refuse to extend coverage.


If you decided to proceed with your trip despite coronavirus fears and yours is a comprehensive policy, it will still cover you for things like:


  • Emergency medical cover,
  • Emergency medical evacuation,
  • Trip cancellation if you fall critically ill while on the trip

Travel Insurance Exclusions Where There Are Active Travel Health Notices


As well as checking for exclusions for epidemics and pandemics, it is important to make sure your plan does not exclude coverage where your government has issued an active travel health notice or a complete travel ban to the country you intend to visit or travel through. 


Some governments, including that of Australia, have banned travelers from China in an effort to prevent the virus’ spread into their countries. In the US, the government has issued a China travel advisory warning citizens not to travel to the Asian country. Other countries have responded with travel restrictions like closing borders, banning flights, and mandatory quarantines upon return from an affected country.

As the coronavirus has army-crawled the whole travel insurance industry into uncharted territory, many insurers are making exceptions and waiving some of their standard terms. 


Where travelers are forced into mandatory quarantine before they can return home before their coverage expires, some insurers now give the option to top up or extend coverage. Before taking any trip during this coronavirus outbreak, ask for any exceptions or changes to terms the insurer may have made recently.

During times of great chaos and uncertainty such as the one thrust on the world by Covid-19, there is no telling what travel restrictions your government can impose and how they can affect your travel plans. Many of these will likely not be covered by your insurance plan, like the potential loss of income while you are holed up in mandatory quarantine.


So, if you absolutely must travel, it is important to ask your insurer what specific coronavirus-related risks your policy will cover you against. Other than that, watch out for the Government Of Canada’s travel health advice.

How To Protect Yourself Against the Coronavirus On Your Travels


Here is a video by the World Health Organization that talks about what to do in order to protect yourself against the Coronavirus.



With or without specific coverages for coronavirus-related risks, your health is still your responsibility. Nothing can be so urgent that you have to risk your health by traveling to an unsafe destination. Avoid travel to any country for which the government has issued an adverse travel health advisory. 


As there is no telling where a new case will be reported, take precautions even if you are traveling to a country where coronavirus cases have not been reported. The WHO advises taking the following protective measures against the Covid-19 coronavirus:


  • Wash your hands frequently
  • Maintain your distance from anyone who is coughing or sneezing
  • Avoid touching your nose, eyes, and mouth to prevent the virus from entering your body
  • Practice respiratory hygiene, like covering your mouth and nose when coughing or sneezing
  • Where you are staying, clean and disinfect frequently touched surfaces and objects
  • Seek medical care early if you suffer coughs, fever, or breathing difficulty
  • Read and watch the news to stay informed on the spread of the coronavirus.


Taking a trip anywhere soon? Do not travel without travel insurance. There is a lot that can happen that you can’t plan for, so it is better to be covered for its financial cost than being surprised when it happens. 


In Toronto, and across Ontario, many travellers buy their travel insurance through the Able Elite Team, a leading insurance brokerage in Ontario. Contact us to discuss your needs.

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