How the top 10 New Zealand travel insurers are handling coronavirus

How the top 10 New Zealand travel insurers are handling coronavirus | Insurance Business

How the top 10 New Zealand travel insurers are handling coronavirus

The COVID-19 pandemic has impacted numerous sectors since the beginning of 2020, but it has left the tourism industry on the brink of collapse as tours and flights have been cancelled, businesses shut down, and workers have lost their jobs.

Chris Roberts, chief executive of Tourism Industry Aotearoa, told Newshub in March that domestic and international travel was down to almost zero because countries went into lockdown and travel agencies cancelled their tours. Several insurers in New Zealand decided not to pay out for customers caught by the pandemic after it became public knowledge, resulting in an influx of inquiries.

As customers scramble to know if they are still covered, the top 10 travel insurance providers in New Zealand, based on Canstar 2020 Travel Insurance Star Rating, have released their own statements about the COVID-19 pandemic and how they are handling the situation:

  1. NZ Travel Insurance

NZ Travel Insurance said its policies have a general exclusion for travel restrictions by the government. Therefore, affected customers should check their travel insurance policy wording regarding travel delay, cancellation, missed connection, and additional expenses and curtailment.

“We will assess claims on a case-by-case basis in accordance to your specific policy wording,” NZ Travel Insurance said on its website. “We are issuing a travel advisory to provide greater clarity around how NZ Travel Insurance policies would respond. As the situation is constantly evolving, we recommend customers keep up to date by following SafeTravel. Our position may change due to the ever-changing nature of this event.”

The travel insurer confirmed in February that it would not pay out for customers caught up in coronavirus-related situations if they purchased their insurance after midday (NZT) of January 30, 2020, as the virus was considered a known event by that time.

“Our policies do not cover claims for losses caused by something that you were aware, or which you ought to have been aware of, at the time of purchasing your policy,” it explained.

For those who took out their travel insurance before the given deadline, the policy wording should provide instructions about the policyholder’s coverage regarding cancellation, additional expenses, and limits and exclusions. Meanwhile, those who have not yet departed may file a claim for trip rearrangement if their pre-booked travel arrangements have been delayed, rescheduled, or cancelled due to the pandemic.

  1. Southern Cross Travel Insurance (SCTI)

The SCTI said on its website that it would not pay out for customers who took out travel insurance after 2pm on January 31, 2020, for travel to or from any country as COVID-19 was no longer an unexpected event at that time.

It would also not provide coverage for those who bought their insurance before January 31 under the TravelCare Policy, Working Overseas Policy, International Student Policy, and Visiting New Zealand. However, it would consider the claims if the policyholder already cancelled or changed their travel plans before 8am on March 12, 2020.

On March 19, the SCTI stopped issuing new travel insurance policies temporarily as per the advice of the New Zealand government.

  1. Travel Insurance New Zealand (TINZ)

All TINZ policies have general exclusion for pandemics and epidemics. Therefore, customers are unlikely to be covered for any coronavirus-related claims regardless of when they purchased their insurance and where they are planning to travel.

“This includes situations where you decide or need to cancel your plans due to the coronavirus, if you are quarantined, or if you suffer travel delays due to the coronavirus,” TINZ explained on its website.

“This [also] applies to all countries you travel to or are planning to travel to, even those which do not currently have a Department of Foreign Affairs and Trade (DFAT) or Ministry of Foreign Affairs and Trade (MFAT) travel warning advisory issued.”

However, policyholders who suffered a loss may still lodge a claim, and the claims team would consider the policy wording and personal circumstances. Those who contracted the virus and were quarantined might not be covered but could still file a claim, which would be assessed on a case-by-case basis.

  1. Worldcare NZ

Worldcare NZ confirmed on its website that its policies have a general exclusion for travel restrictions by the government. Therefore, customers must check their policy wording regarding travel delay, cancellations, missed connection, and additional travel expenses and curtailment.

“If your travel plans are directly impacted, we will assess claims on a case-by-case basis in accordance to your specific policy wording,” Worldcare advised.

As of February 2020, the insurer would not respond to policyholders who wanted to cancel their travel plans to anywhere except mainland China.

“For example, if you are travelling or transiting through Hong Kong and Singapore, on January 30, 2020, MFAT has not issued travel advice about these destinations. If your flights through these ports have not been cancelled, but you do not wish to take them, this would not be claimable under our policies,” the insurer explained.

Worldcare NZ advised customers who were travelling before the lockdown to check the policy wording regarding cancellation, additional expenses, and exclusions. Those who have not yet departed could file a claim for rearrangement of their trip if their pre-booked travel arrangements have been delayed, cancelled, or rescheduled.

  1. AA Travel Insurance

AA Travel Insurance would not provide coronavirus-related coverage for those who took out insurance after March 16, 2020. It would only consider curtailment claims related to the virus if there is an updated “no travel” notification from the DFAT for the customer’s destination while on holiday, and it would consider medical expenses claims if the policyholder contracted the virus while on their trip.

If the pandemic impacted a policyholder’s trip, the customer should first contact their travel provider to reclaim costs. Those who do not receive refunds could then contact the underwriter of the policy, AXA Assistance Claims Centre. If a policyholder’s flight was cancelled, AA Travel Insurance offers either a new flight schedule at a later date or a refund.

  1. 1Cover Direct Insurance NZ

1Cover Direct Insurance NZ policies have a pandemic and epidemic exclusion, so it does not provide cover for customers regardless of when they bought the policy and where they planned to travel to.

“This includes situations where you decide or need to cancel your plans if you are [in quarantine] or if you suffer travel delays due to the coronavirus. This [also] applies to all countries you [visit], even those for which DFAT/MFAT has not raised a travel-warning about,” it said on its website.

Those who contracted the virus overseas would most likely not receive cover but should still call 1Cover’s emergency assistance number for non-financial advice and assistance.

“It is extremely difficult to assess the scale and cost of catastrophic global infection diseases like coronavirus. To include cover for events at a global scale could make travel insurance premiums unaffordable for the general public,” the insurer explained.

However, 1Cover Direct Travel Insurance still encourages its customers to make a claim despite the exclusions as it assesses each claim based on policy wording and individual situation.

  1. Aon NZ

According to Aon, plans with Cancel for Any Reason (CFAR) benefit allow policyholders to cancel for fear of something potentially happening, including any COVID-19 concerns. However, the insurer warned that the policyholders might not always get a 100% refund.

It clarified that most traditional travel insurance policies provide coverage if the customer contracts the virus or another illness during their trip, regardless of if they have a CFAR option or not.

“They could be eligible to receive medical benefits to cover emergency medical expenses, trip interruption to pay for certain extra expenses, emergency assistance to arrange local medical care, and even, if very serious, a medical evacuation back home,” Aon said.

Aon advised customers to contact their broker if they have questions, given the individual insurer restrictions.

“The most direct impact is on travel insurance, with all providers issuing policy notices and endorsements that remove or restrict cover for COVID-19 related claims,” it said.

  1. Columbus Direct Travel

Columbus Direct Travel said it would not provide cover for any coronavirus-related events for policies purchased after March 13, 2020 – even on trips booked before the renewal date.

Customers who contracted COVID-19 while on a trip must contact Columbus Direct Travel’s 24-hour medical assistance for help to receive medical treatment, with the medical costs covered by insurance. Policies’ catastrophe section also provides coverage for extra accommodation or transport costs if the customers were forced to move from their pre-booked accommodation because of the pandemic.

Policyholders who have not yet departed are in luck as Columbus Direct Travel’s policy covers for cancellation due to travel restrictions by the government, subject to the policy being purchased before the Foreign and Commonwealth Office advised against travel.

“Given that the travel advice could change again at any time, we are only reviewing claims where you are cancelling within 48 hours of your booked departure time. If you contact us more than 48 hours prior to your planned departure time, you will be advised that we cannot accept your claim at this time,” the insurer clarified.

“Cover is provided for costs that cannot be recovered from your travel or accommodation provider. You should contact them in the first instance to determine what costs can be recovered,” it continued. “If the trip is simply postponed to later in the year and is for the same destination and duration, then your policy can be updated free of charge. If you have made any changes that require a premium adjustment, then you will be refunded or charged as appropriate.”

  1. Chubb

Chubb said cover would depend on the type of plan and individual circumstances, but it might reject coverage for a known event under the terms and conditions of some policies.

“[We] will assess all claims in accordance with the facts of each case, the policy wordings, and any applicable certificate of insurance,” Chubb said on its website.

If a travel disruption or cancellation loss occurred, the insurer advised customers first to contact their airline or travel agent for refunds of alternative travel arrangements based on their tickets.

“After this, if you still have a loss, you may wish to submit a claim along with the original and amended itineraries and relevant documents to substantiate your remaining loss,” Chubb concluded.

  1. State Insurance

In March 2020, IAG Insurance Group subsidiaries State and AMI Insurance said they would still cover claims for medical events related to COVID-19.

Will Ashcroft, general manager of sales and distribution New Zealand and special projects APAC at Cover-More Group, told Stuff.co.nz that medical costs in other countries could reach tens or hundreds of thousands of dollars, so it is “critical” to provide cover for customers.

He clarified that the insurer would not offer cover for customers who travelled to mainland China on policies booked after February 03, 2020. However, the insurer would cover other customers in the event of hospitalisations, medical evacuations, and repatriations due to the pandemic.