Gail Cohen wants to cancel her Southeast Asia cruise on the Seabourn Ovation. And with good reason: The deadly coronavirus is ravaging nearby China, spreading fear and uncertainty. “We are terrified,” says Cohen. Passengers like her want to know if their travel insurance policy covers the coronavirus. Can they receive a full refund if they call off their vacation plans?
The quick answer: No.
Your travel insurance probably won’t let you cancel your cruise or vacation to Asia and receive a full refund. “Most travel insurance plans don’t offer coverage for pandemics like the coronavirus,” says Cory Sobczyk, a vice president for business development at Arch RoamRight, a travel insurance company based in Omaha, Neb.
But there are important exceptions. And it helps to understand the coronavirus and how it could affect your trip. Someone like Cohen has options, although they are limited. They range from asking her cruise line to reschedule the cruise to relying on her limited cruise insurance. And there’s always the option of canceling her vacation.
Before we go there, let’s answer the question.
What type of travel insurance covers the coronavirus?
- Only a “cancel for any reason” travel insurance policy allows you to cancel your vacation because you’re afraid of an infection.
- Standard “named perils” policies usually exclude epidemics and pandemics. But they will cover you if you become sick on your trip.
- If you have not booked your vacation and are still in the planning phase, you can either change your destination to avoid Asia or you can buy an insurance policy that will cover you.
What is the coronavirus and how will it affect my trip to Asia?
The coronavirus (2019-nCoV) is a respiratory illness first detected late last year in Wuhan, China. Symptoms include fever, cough, and shortness of breath. Coronavirus can cause anything from mild sickness to severe illness and death. For the latest on the coronavirus, check out the Centers for Disease Control’s situation summary.
As of Feb. 1, 2020, the World Health Organization reported 11,953 confirmed coronavirus cases and 259 deaths, most of them in China. Infections have also spread to at least 15 other countries, including the United States. The U.S. government has taken the rare action of quarantining any citizen returning to the United States who has been in Hubei Province in the last two weeks.
If you have immediate plans to travel to Asia, experts say you should reconsider them. “The best advice for travelers is to contact their airline and their hotel and ask for the cancellation policy for pandemics — and for the coronavirus in particular,” says Jeremy Murchland, the president of Seven Corners.
If you’re already in China, check your travel insurance for non-medical evacuation coverage, advises Zubair Jeewanjee, CEO of the travel tech company G1G Travel.
“If the severity of an outbreak gets to a level in which the U.S. State Department issues an official statement which requires mandatory evacuation, like what just happened in Wuhan, China, then you can claim compensation for the evacuation up to the limits on your plan,” he says. G1G has posted an advisory on its site for people visiting the United States.
U.S. airlines have canceled flights to Asia and loosening ticket restrictions. For example, United Airlines will allow refunds for unflown flights, even for nonrefundable tickets, if you’re flying to Wuhan. If you have a ticket to Beijing, Chengdu or Shanghai, United will let you change your flight and waive any change fee or fare differences.
The current outbreak is similar to the 2009 SARS epidemic, at least when it comes to the level of concern from travelers.
“We’re seeing a spike in calls and online questions,” says Phil Sylvester, a spokesman for World Nomads, a travel insurance company. “Our clients want to know if they can cancel because they are scared to travel or what happens if they get sick while they are traveling. Some are even diverting travel arrangements from Asia entirely, not just China.”
What about that cruise to Asia?
I’ve been fielding a lot of questions about travel insurance and the coronavirus at my nonprofit consumer advocacy site. They’re agonizing. People like Cohen are fearful that they will get infected on their trip and want to do their best to avoid it. At the same time, travel companies don’t want to lose any money by canceling their trips. So they’re doing their best to calm their customers’ worries while not sacrificing revenue.
I asked Seabourn about the Cohen’s cruise. A spokesman told me that the U.S. Centers for Disease Control Level 3 travel warning to China issued Jan. 27 prompted it to cancel a scheduled Ovation port of call in Xiamen, China, on Feb. 3. Instead, the ship is heading to Sandakan, Malaysia.
“No other ports of calls in the region have been canceled,” Seabourn spokesman Brian Badura told me. “Our team has been actively working with these guests to listen to their concerns, offering them alternative travel options around the same time, and working to help identify a solution.”
That leaves the door open for Cohen and her husband to reschedule their cruise. Air Canada has already canceled the couple’s flight. But it’s unlikely Seaborn would bear all the costs of a rescheduling. (Another Seabourn customer that my advocacy team has been in contact with reports that Seabourn would not cover any costs related to a scheduling.) Travelers like them would probably be on the hook for change fees and any related hotel cancellations. And isn’t that what travel insurance is for?
Don’t expect the uncertainty to end quickly, says William Spangler, global medical director with AIG Travel. Typically, experts look for a high spike in cases, followed by a plateau. That would suggest the worst is over.
“We need to let time go by and see what happens,” he adds. Even so, it may be months before things go back to normal. If the worst is behind us, that would be April or May.
What kind of travel insurance covers a coronavirus outbreak?
Of course, there’s a longer answer to the question: Does travel insurance cover the coronavirus? The answer is yes — under certain limited circumstances.
If you get sick in Asia, and you have a standard insurance policy, you might be covered. “If you plan on traveling to China or its surrounding areas, you may be eligible for coverage if you fall ill during your trip,” says Brad Streff, a spokesman for Travelex Insurance Services. “This includes coverage for emergency medical expenses and medical evacuation. These benefits can help protect you financially if you have an emergency medical situation while traveling.”
Travel insurance will cover you if your policy includes pandemic coverage. “It’s important to check your plan’s exclusions to make sure that the policy doesn’t exclude pandemics or epidemics,” says Atilio Spaccarotella, the CEO of the health app Rene Health, a health app. Note: Most insurance policies with named exclusions do not cover pandemics or epidemics.
Fear of infection is not a valid reason to cancel. If you simply want to call off your trip because you’re afraid you might get sick, a standard policy probably won’t cover you. “Travelers are typically concerned with wanting to cancel for fear of contracting the virus,” says Megan Moncrief, the chief marketing officer for Squaremouth.com, a travel insurance site. “If trip cancellation coverage is the main concern, we are advising against purchasing a policy, as this type of outbreak doesn’t fall under the standard list of covered cancellation reasons.”
Cancel for any reason insurance will cover you, but … There’s one policy that will cover you if you have to cancel your travel plans: a “cancel for any reason” policy. “It allows you to cancel for fear of something potentially happening, including coronavirus concerns,” explains Beth Godlin, president of Aon Affinity Travel Practice. However, she says it’s important to understand that you may not always get all of your money back. Some policies reimburse between 50% to 75% of your trip’s cost. “You may receive a portion of your loss, receive future travel credits, or both,” says Godlin. Also, “cancel for any reason” policies are pricier than named-peril policies — usually 10% of the cost of your trip, compared to about 4% to 6% of your trip for a standard policy.
Where to buy insurance for coronavirus coverage. If you’re taking a vacation soon and are afraid it might be affected by the coronavirus, you can do something. Get a “cancel for any reason” policy from a reputable travel insurance source. You can purchase a policy directly through a company like AIG Travel, Allianz Travel Insurance, Arch RoamRight, Generali Global Assistance, Travelex or through a travel insurance site like Seven Corners, G1G Travel or Squaremouth.
Coronavirus: Should you stay or should you go?
Bottom line: Travelers may be left with few good options when it comes to protecting their trips in the wake of the coronavirus outbreak. From my perspective, that makes it difficult to help travelers like Sara Alimoot. She contacted me a few days ago about her South Asia cruise, which leaves in a few weeks. And she wanted to know: Does travel insurance cover the coronavirus?
“With the recent outbreak of the coronavirus spreading across Asia I’m am beginning to feel somewhat nervous for the health of my children and the protection of my trip,” she told me. “I have been looking into travel insurance. I’ve reviewed several insurance policies and while I feel I could make a case under some of the policy details, have not seen details specific to an outbreak or epidemic.”
For people like her, a “cancel for any reason” policy is best. But if coronavirus spreads, it might not be enough, says Steve Dasseos, founder of TripInsuranceStore.com, a travel insurance site.
“If the coronavirus is everywhere and you’re afraid to go to Walmart, I’d skip taking a trip,” he says.