Coronavirus and travel: Knowing your rights when it comes to insurance

Mar 15, 2020
Travel insurance can be a confusing area to figure out. Source: Unsplash.

With the current coronavirus outbreak showing no real signs of slowing down, many travel plans are up in the air, leaving people in a constant state of anxiety regarding prepaid flights and a potential lack of insurance cover. So to clear things up, here’s what the recent pandemic status of the virus means for Australian travellers.

Insurance

Earlier this week, the World Health Organization (WHO) officially labelled Covid-19 (which is the official name given to this previously unseen strain of coronavirus) as a pandemic, meaning travel plans and relevant insurance will definitely be affected. However, coverage on pandemics and epidemics can differ greatly between policies.

According to Lisa Kable from Insurance Council Australia, the only set rule so far for travel insurance is that any policies purchased after Covid-19 became a known event between 20-31 January (the specific date differs between brands) are unlikely to provide cover relating to the outbreak.

“Most travel insurance policies have exclusions for outbreaks of infectious diseases, pandemics, epidemics and/or known events that could lead to a claim,” she said. “These exclusions are clearly stated in the Product Disclosure Statement (PDS). Each travel insurer’s product is different.”

Comparison website Finder recently analysed the product disclosure statements of 32 travel insurers in Australia to see who out of the selected brands covers what when it comes to these unique international health cases. Although these lists give a general idea of what customers will receive under their insurance, Bessie Hassan from Finder said that it doesn’t cost anything to submit a claim so if you’re unsure, it’s always best to lodge one even if you think it’ll go unpaid.

“While some brands have exclusion clauses relating to pandemics, others have announced that they may still cover some claims related to coronavirus,” she said. “The best thing to do is to contact your insurer directly. They can offer the most up to date information regarding the eligibility of your claim.”

The findings discovered that only nine of the policies included some cover for claims relating to epidemics or pandemics, however, it varies greatly between each. These include:

  • Columbus Direct
  • ING Travel Insurance
  • Insure4less
  • InsureandGo
  • Tick Travel Insurance
  • Tilda
  • Travel Insuranz
  • Travel with Jane
  • Travel with Kit

Meanwhile, 15 companies indicated that claims related to an epidemic, pandemic or even simply a threat of either would be excluded to some extent. However, some of these brands have since issued recent travel alerts stating that they may pay out for some claims relating to the virus, which is why it’s important to check with the individual insurer. The full list includes:

  • Budget Direct
  • 1Cover
  • Australia Post
  • Boomers
  • CoverMore
  • Fast Cover
  • Holiday Rescue
  • iTrek
  • Online Travel Insurance
  • Southern Cross Travel Insurance
  • Virgin Money
  • Webjet
  • World2Cover
  • Worldcare
  • Zoom

Finally, eight brands of the 32 overall didn’t reference epidemics or pandemics at all in their policies and weren’t exactly clear on how related claims would be treated. These include:

  • ahm
  • Allclear
  • American Express
  • Medibank
  • Qantas
  • RACV
  • Travel Insurance Direct
  • Travel Insurance Saver

Hassan also mentioned that with the temptation of cheap flights and accommodation, those looking to travel during this time are still encouraged to purchase travel insurance. Although it is unlikely to cover anything coronavirus-related, it will still cover all of the regular items such as broken legs and lost baggage. However, travellers can take comfort in knowing that some policies are still being sold that offer cover for medical expenses overseas for coronavirus. The complete list of the 32 insurance brands from the audit can be found here.

Flights

With the outbreak continuing, and the government enforcing a level four travel ban, airlines have been updating customers as often as they can. Virgin has suspended all international flights from 30 March to 14 June while also reducing domestic flight capacity by 50 per cent until 14 June, in which the route and schedule detail will be published over the coming week.

A spokesman from Virgin Australia said that passengers with an existing international booking or those who are making a new international booking for travel between now and 30 June 2020 can reschedule and even change to a new destination if they want without being charged a fee. Those who do not want to travel can take a travel credit instead.

Customers who have been affected by the suspension will be contacted by the airline in the next two weeks and are asked not to contact the help centre unless they are travelling within the next 24 hours or need immediate assistance to return home.

Meanwhile, Qantas has been in the news recently after asking two-thirds of all employees to temporarily step down amidst the corona-crisis to preserve jobs in the longterm. Additionally, a total of 150 aircrafts will be temporarily grounded within both Qantas and Jetstar.

Recently, both airlines have suspended scheduled international flights from the end of March following the latest government travel advice with some flights continuing due to key links based on ongoing discussions with the government. As for domestic flights, there has been a 60 per cent reduction as the airline focuses on cutting frequency.

Customers of both Qantas and Jetstar will be contacted about these changes by next Monday by the airline but those who booked through a third party website or a travel agency should contact the business directly. However, due to high demand and long wait times, customers are being asked to only contact airline help centres if they have travel plans within the next 48 hours.

Qantas will be converting all bookings on cancelled flights to a travel credit which can be used anywhere on their network. Meanwhile, any customers travelling before the end of May who wish to change their bookings are also eligible to receive a travel credit instead.

Getting your money back

When cancellations or fear of travel stops someone from travelling, getting a refund can be confusing and difficult, especially in these special cases. Recently the Australian Federation of Travel Agents (AFTA) released a statement that said cancellation on trips booked through an agent will still be subject to the cancellation and other fees that would have been applicable at the time of booking.

The statement also suggested that accepting a credit note may be the best way for customers to minimise additional fees should they choose not to travel at this time.

Meanwhile, Director of Comparetravelinsurance.com.au, Natalie Ball says that reimbursement across the board will depend on booking methods, but its recommended people contact travel providers directly before making a claim through insurance to show they’ve done what they can to reduce claim costs.

Avoiding paying for accommodation upfront is also a smart decision, as is keeping an eye on the different rules that apply to discount fares and possibly going with the more flexible full fare instead to play it safe. Ball also suggested those with non-refundable travel costs to explore their credit card benefits.

“If you booked your travel with your credit card, you might be able to lodge a dispute for cancelled or unfulfilled services,” she said. “Many credit card brands include purchase protection benefits, which protect your purchased items for anywhere from 30 days to a year after purchase, provided that you paid for them on your credit card.”

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