The coronavirus proves why it’s important to read the fine print of your travel insurance policy

Standard policies won’t cover trips cancelled due to COVID-19 — but there are some exceptions.

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People who have purchased travel insurance are learning they may not be compensated for canceling their trip due to COVID-19.

The World Health Organization (WHO) declared the coronavirus outbreak a pandemic on March 11th. And as of June 30, the WHO confirmed 10,185,374 cases of coronavirus globally and 503,862 deaths. Although the virus is appearing all over the world, so far the majority of the cases that have been reported are in the Americas and Europe.

Although the Government of Canada has put a ban on all non-essential travel outside of Canada, standard travel insurance policies don’t cover the costs of canceling planned travel to a region for fear of contracting the deadly virus.

Epidemics and pandemics like the coronavirus are typically excluded under a policy’s “named perils.”

“I haven’t read the wording of every policy of every provider in every country in the world, so I can’t say for sure, but I very much doubt any provider would specifically include epidemic as a covered reason,” Phil Sylvester, Head of PR and Media Communications for World Nomads, told Finder.

“What providers tend to do is list things they believe will expose them to high levels of risk and exclude them from cover. You’ll usually find these in a section of the policy titled ‘general exclusions.’ That means they apply generally regardless and override anything else in the wording,” Sylvester explained.

There is one exception.

“Cancel For Any Reason” (CFAR) coverage can reimburse travelers who want to change or cancel their trip because they’re scared to travel. In fact, it can reimburse travelers if they change their mind for any reason. But it can add a hefty cost on top of your trip expenses.

The rate can climb even more for older travelers and those in poor health, and some travelers may not end up qualifying for it at all.

CFAR coverage has other limitations, too. It must be purchased well before your trip, possibly 15-21 days of the initial deposit on your trip. It typically only reimburses travelers for a portion of their prepaid trip costs (like up to 75%).

Does your policy apply if you get sick on your trip?

If you purchased a standard travel insurance policy after the coronavirus was declared a pandemic on March 11th, you probably won’t be covered for any losses.

“If ‘epidemic’ is not in the general exclusions [of your policy], it does not mean it is covered. There may be other clauses which apply,” Sylvester explained.

“For example, once a risk becomes ‘known,’ you cannot buy coverage for it — in the same way you can’t buy car insurance after you’ve crashed your car,” Sylvester said.

But if you bought your policy before the event was predicted, you might be covered for trip cancellation. In this case, it would be best to contact your travel insurance.

Advice for travelers who are already outside of the country

If you already traveled out of the country, check to see if your travel insurance includes non-medical evacuation coverage. This kicks in when the Canadian Government requires mandatory evacuation of Canadian residents in an affected area.

If you have this coverage, you may be able to claim compensation for the evacuation up to the limits on your plan. But the policy may also have special exclusions for pandemics.

In a nutshell, it comes down to your provider and the “specific wording of your policy,” said Sylvester — which is why it’s important to read your policy documents carefully.

The Canadian Government is also providing financial assistance though loans to help Canadians currently out of the country to return home. In fact, Prime Minister Justin Trudeau has announced that Canadian border restrictions are being lifted to allow the entry of those who are immediate family members of Canadian citizens or permanent residents (normal quarantine rules still apply, which require people entering the country to stay quarantined for 14 days). The US-Canada border closure has been extended until July 21.

What to do if you haven’t bought travel insurance yet, or the airline canceled your trip

If you’re planning a trip out of the country for some time in the future (and hoping the travel ban will be lifted by then) but haven’t purchased a policy, your best bet is to add a CFAR rider to your coverage or go with a provider that doesn’t list pandemics among its exclusions.

If you haven’t bought travel insurance and your upcoming trip to parts of China or some other banned location is cancelled, you might be able to get some of your airfare money back or opt to reschedule your flight.

For example, as of March 24th, Air Canada has stated that you may be eligible for a full credit for travel impacted by COVID-19, while Westjet is offering a $0-fee waiver for certain eligible flight changes or cancellations.

Keep up-to-date on all things related to COVID-19

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