In the wake of the coronavirus many people are canceling trips, debating whether they should travel and wondering if they do, should they purchase travel insurance. No doubt it’s a good time to take a closer look at what travel insurance can and can’t do.
Here’s what you need to know before you hit the road.
What if …
Travel insurance is designed and priced to protect against unforeseen events. Events that are foreseeable and likely to happen are generally not eligible for coverage. However, Cancel For Any Reason coverage is so named because it can be used for whatever you deem necessary.
“You can cancel for fear of something potentially happening, including coronavirus concerns,” says Beth Godlin, president of Aon’s Affinity Travel Practice in Garden City.
Be sure you understand the terms though. “Some programs have this benefit available with the plan or as an upgrade. Also note what percentage of the trip might be either refunded in cash or returned in a credit, as those terms can vary dramatically,” says Godlin.
Not all plans provide the CFAR option. But most traditional travel insurance policies provide coverage if travelers contract the virus or another illness during their trip. 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, says Godlin.
Contact your health insurance company before you jet set. Find out the specifics, what medical services are provided when abroad and what are not so you can decide if you want to supplement coverage and explore options.
“The level of medical coverage available for international travel can vary widely, depending on your domestic health care provider and plan. But keep in mind that most regular health insurance plans provide partial or no coverage while traveling in another country. Countries with universal health care might assist with minor needs, but in the event of major or ongoing medical expenses, they would cease to help, and would not pay to help with the return trip home,” warns Godlin.
If traveling within the United States, Medicare coverage travels with you. However, the rules change when overseas. Medicare does not cover emergency medical service for travelers out of the country.
“Don’t assume a health insurance provider will pay to transport you back to the United States if overseas, or even back to a home medical facility if traveling domestically,” says Godlin.
Read the fine print
First you need to look carefully at policy exclusions, especially now that areas of China have been named as no-travel zones. “Many policies exclude coverage for travel to known-dangerous areas and thus may exclude reimbursement for issues that come up during travel to China,” says Erik Josowitz, analyst with insuranceQuotes.com, which publishes insurance industry studies and data.
Next, determine whether the policy is designed to be a primary or secondary payer for medical costs. A secondary payment policy is designed to pay for costs not covered by the traveler’s personal insurance policies. This may mean you have to pay deductibles and copays out of pocket. A primary payment policy, on the other hand, is designed to be the first payer for any incurred medical costs. All policies will also have limits — a maximum they will pay — and many will also have deductibles or other limitations.
“Be sure you understand the limits of any policy, and how the policy meets your expected needs, before purchasing,” says Josowitz.
The bottom line
Melanie Musson, an insurance expert and writer for USInsuranceAgents.com says your best bet for coverage that will reimburse you if you decide to cancel your trip due to the coronavirus, is to get CFAR insurance.
There is a caveat — your trip shouldn’t be to a place with a known outbreak. Check the CDC’s level 3 warning and confirm with your travel insurance agency. “If an outbreak is declared after you have purchased coverage, you may cancel your trip and you will be covered,” says Musson.
This level of coverage won’t be cheap. “It could easily cost 10 percent of the cost of your trip, and it will only reimburse you 50-75 percent of your trip costs, but it’s your best option if your main concern is the coronavirus.”