New Zealand:Insurance Council outlines COVID-19 travel insurance policies

As the potential of a trans-Tasman travel-bubble becomes more likely, the Insurance Council of New Zealand (ICNZ) has issued clarification on changes to travel insurance in response to the COVID-19 pandemic.

Mr Tim Grafton, ICNZ chief executive, says the sector has responded to the new reality of global travel amid the significant uncertainty and limitations COVID-19 presents.

"Insurers have constantly looked at ways to support their customers for the day the travel bubble becomes a possibility, introducing tailored policies that provide cover for a range of COVID-19 related claims.

Specific COVID-19 claims

"In addition to the normal travel insurance cover, some policies may include cover for specific COVID-19 claims such as cancellation costs if you contract COVID-19 and can’t travel, costs to return home if a relative gets sick with COVID-19 or costs if you get sick with COVID-19 and need to quarantine while overseas. Some also cover reasonable costs if the person you are supposed to stay with gets COVID-19 and you need to find alternative accommodation.

Border closure risks

However, border closures imposed by a government are not covered by any insurer as it is simply not possible to develop a product that accounts for the uncertainty and the level of risk this presents, Mr Grafton says.

"Insurers and customers need certainty of the exact dates and times borders open or close so that they know when cover is available and when it is not."

Wider travel coverage

ICNZ stresses that it is still important to purchase travel insurance for the wider cover it offers.

"Travel insurance is still available to purchase and offers cover for a variety of unforeseen events as outlined in individual policies — such as a broken leg, theft or lost baggage or the impacts of a significant weather event." As each policy will differ, ICNZ strongly advises anyone purchasing travel insurance to read the policies thoroughly and to ask the insurer any questions they may have about what is and isn’t included.

At present policies won’t cover:

- Cancellations to travel caused by government-imposed lockdowns

- Costs if the government imposes a blanket quarantine

- Travel delay caused by COVID-19

- Border closures due to COVID-19

- Travel to any other countries where there is still a ‘do not travel’ alert in place.

Cover that might be offered by some insurers with specific COVID-19 extensions include:

- Cancellation costs if the policyholder gets sick with COVID-19 before he or she goes away

- Costs to return home if a relative gets sick with COVID-19

- Costs if the policyholder gets sick with COVID-19 and must quarantine

- Reasonable accommodation costs if the person the traveller was supposed to stay with contracted COVID-19

- Cancellation costs if leave is revoked - if the policyholder is an essential health worker and the leave is revoked due to COVID-19, the policyholder can claim the non-refundable costs

- Cancellation costs for denied boarding due to a positive COVID-19 test at the airport — the policyholder and travelling companion can claim the non-refundable, prepaid cancellation costs provided that a public health authority directed the policyholder and her or she did not have knowledge or awareness of a positive test result at the time of the policy purchase

- Cancellation due to being a close contact with someone with COVID-19 — Cancellation or amendment costs for a prepaid trip subject to the cancellation benefit limit on the policy if they have been directed to quarantine by a public health authority because they deemed to have had close contact with someone diagnosed with COVID-19 and can’t go on their trip.

Source: Asia Insurance Review