How the top 10 Australian travel insurers are handling COVID-19

How the top 10 Australian travel insurers are handling COVID-19 | Insurance Business

How the top 10 Australian travel insurers are handling COVID-19

The COVID-19 pandemic has proven a fierce enemy for the tourism industry as it has forced airports to cancel flights and businesses to shut down or, in some cases, let go of employees.

The Tourism & Transport Forum (TTF) Australia predicted in March that international visitation would drop by 40% from January to June 2020 compared to the same period in the previous year. It also estimated a 15% to 20% staffing reduction in the sector – with the net effect being an estimated reduction of 99,000 to 133,200 jobs in mostly part-time, casual, contractual, or seasonal positions.

With the Australian tourism industry struggling to handle the impact of the pandemic, several travel insurance providers have decided not to pay out to customers caught by the effects of COVID-19, resulting in an influx of inquiries from frustrated and anxious policyholders.

The top 10 travel insurance providers in Australia, based on consumer advocacy group Choice’s 2020 expert rating, have released their statements about how they are handling the COVID-19 crisis. These are outlined below.

  1. Good2Go Travel Insurance

Good2Go has stopped offering travel insurance to new customers temporarily following the Department of Foreign Affairs and Trade (DFAT)’s latest advisory banning travel to all destinations.

Customers who want to adjust their travel plans could ask the insurer to change the dates of their single trip insurance to anytime up to December 2021 – provided that no claims have been submitted against their policy. It will not charge the customer if the new trip includes the same destination and duration as the previous plan.

“Our policies will not provide any cover while the Foreign and Commonwealth Office (FCO) is advising against all but essential travel.  If you purchase a policy for later on in the year, [the] cover will commence instantly when the FCO travel ban is lifted,” Good2Go said.

  1. RACV

RACV has stated that customers who contracted the virus and were hospitalised and quarantined while travelling overseas would be covered for medical expenses and associated expenses under section 2 of their policy, provided that the policy was issued before 7am on January 20 and the policyholder did not enter a “Do not Travel” region at the time. It would also consider providing coverage for those whose plans got impacted by the “Do Not Travel” order under section 1 of the policy for rescheduling the trip.

RACV noted that its policies do not include a general exclusion for pandemics, epidemics, or infectious diseases. Therefore, coverage depends on the policy’s date of purchase.

Customers who took out their policy after the deadline would not be covered for coronavirus-related events anymore as the insurer considered COVID-19 as a known circumstance at that time. The insurer would also not provide coverage for those who want to change their travel plans due to fear of contracting the virus.

Those who have not started their trip but took out their policy before 7am on January 31 would not have medical coverage in Australia under any section of the policy.

  1. Travel Insuranz

On March 18, 2020, the government banned Australians from travelling overseas until further notice and advised those on an overseas trip to return to the country as soon as possible. As a result, Travel Insuranz decided that it would not provide coverage for coronavirus-related cancellations for customers who took out insurance on or after March 07, 2020.

Travel Insuranz said policyholders must take the necessary steps to limit or reduce their out-of-pocket expenses, including speaking with their airline, travel agent, and accommodation provider to determine alternative travel arrangements. It also encouraged policyholders to file a claim with all supporting documentation.

The insurer would provide coverage for curtailment if the customer purchased their policy before March 07, 2020 – including reasonable, additional costs for travel and accommodation to return to Australia.

  1. Go Insurance

Go Insurance provides cover for claims related to medical epidemics. However, its travel policies have exclusions related to events known to the customer at the time of purchase – with circumstances manifesting between the dates of booking the trip and purchasing the policy also excluded. Therefore, it would not provide coronavirus-related coverage for customers who took out a policy on or after January 23 following the government’s travel warning due to the pandemic.

“From late January 2020, the outbreak has been widely published via mainstream media and as such is considered a ‘known event’. It could reasonably be expected that COVID-19 could lead to trip cancellation, travel disruption, and illness,” Go Insurance said on its website.

  1. Insureand Go

In Australia, InsureandGo is providing cancellation cover for customers that bought policies before 4pm on January 31 – after this point COVID-19 was considered a known event and therefore it does not offer further cover.

In a statement sent to Insurance Business on May 20, it outlined that cancellation cover is applicable to customers departing before June 17 as per the current Government ban, and that it decided to stop selling new travel insurance policies starting March 23 because of the impacts of COVID-19.

It also noted that it is offering partial credits on Single Trip policies to policyholders who have not made a valid claim and can no longer travel as planned due to the impact of COVID-19, while it is offering deferral on Annual Multi Trip policies to policyholders who have not made a valid claim and can no longer travel as planned due to the impact of COVID-19.

  1. Travel Insurance Direct

Travel Insurance Direct decided to stop selling new travel insurance policies starting April 01 due to the impacts of the COVID-19 pandemic and the government’s travel restrictions. It would also not provide coverage for any loss or damage related to COVID-19 for travellers who took out a policy after 7pm on January 30, 2020.

“At this stage, we can’t say with certainty when we will be able to start selling international travel insurance again. We will continue to monitor the situation closely and will advise travellers once we resume issuing new travel insurance policies,” Travel Insurance Direct said on its website.

On the bright side, the insurer confirmed that those who took out a policy before the cut-off date might still have coverage. It may also offer cover if the policyholder cannot continue their trip due to illness or injury.

“Loss related to these events ceased to be covered from the date they became known events. Please consider your PDS or policy wording for full details of what events are insured under your travel insurance policy before you choose to continue your journey or choose to travel as this decision may also affect or limit cover for insured events,” Travel Insurance Direct advised.

  1. World Nomads

World Nomads stopped selling international travel insurance policies beginning April 01 due to the pandemic and the government’s travel restrictions. It also does not provide any cover for claims related to COVID-19 for travel to and/or from China for policies purchased after 5pm on January 23, 2020, and other destinations for policies purchased after 6am on January 31, 2020.

“After these dates, this virus is a well-known and publicised event, and any disruption to your itinerary caused by COVID-19 is not considered sudden, unforeseen, unavoidable, or outside of your control, which is an important condition of coverage under the Australian resident policy,” World Nomads said on its FAQs.

“If you have to cancel your trip, contact your providers and see if you are able to obtain a refund for your arrangements before you make a claim on your policy.”

  1. AIG

AIG offered assurances that it regularly contacts the WHO, the Centres for Disease Control (CDC), and other medical professionals to monitor developments closely and provide relevant information that could help its customers and stakeholders to make informed decisions.

The insurer advised travellers to check their policy wording for cover entitlement, eligibility, and type of expenses that can be considered for claims. Customers could also modify their policy, request a premium refund or voucher, and file a claim on the AIG online resource centre.

However, AIG will not provide cover for losses and damage related to COVID-19 unless the policy was issued or the travel insurance arrangement was confirmed before January 24, 2020.

“The terms and conditions of your policy wording cover may be restricted or excluded if (i) you were aware of or could be expected to be aware of an event which may give rise to a claim under the policy at the time of taking out the travel insurance policy; or (ii) you do not take precautions to avoid a claim after a warning about the event has become publically known,” AIG said on its website.

“For complimentary insurances and annual multi-trip travel policies, the date you took out your travel insurance policy is generally deemed to be the date you activated cover for that trip by purchasing the travel arrangements.”

  1. American Express

American Express said it does not provide coverage for fear of contracting coronavirus or trip cancellations for any reason. Therefore, policyholders must check their certificate of insurance or a sample of the certificate on the company’s website for a list of covered reasons.

However, customers must not lose hope yet as American Express has decided to implement a one-time exception to the applicable “free look” periods stated in the American Express Travel Insurance (AETI) policy.

Under the exception, the insurer will honour requests to terminate the customer’s policy and provide a full refund of premiums, which will be considered an agreement by the insurer and the policyholder that the insurance had never been issued in the first place.

American Express clarified that it would only honour requests if the policyholder met the following conditions:

  • The common carrier for the trip cancelled the trip after January 21, 2020 because of COVID-19; or
  • The policyholder cancelled their trip planned to commence before 12:01am on June 01, 2020 because of COVID-19; and
  • American Express has not yet paid out any claims under the policy for any reason in consideration of the refund; and
  • The policyholder requested to terminate the policy after its “free look” period expired.

“We expressly reserve the right to refuse any requests to terminate or rescind coverage in exchange for a full refund of premiums,” American Express said.

  1. Bupa

Travellers with Bupa’s global annual multi-trip or single travel insurance, Danish annual multi-trip or single travel insurance, or Schengen travel insurance would not be covered for coronavirus-related events anymore in compliance with the epidemic exclusion in the company’s standard policy conditions.

Customers in Mexico, Jersey, Guernsey, Falkland Islands, Isle of Man, Gibraltar, and the UK cannot purchase new travel insurance policies starting April 14 temporarily.

On the bright side, all customers who purchased their travel arrangements before April 14 could be covered for eligible medical claims and emergency assistance related to the COVID-19 pandemic for the duration of their planned trip if the trip would end before 2021.

“If you renew or extend your cover, the same COVID-19 conditions apply as per when you purchased your travel arrangements,” Bupa said.