travel insurance
With the coronavirus scare, many people are questioning whether or not to travel. (Photo: SolStock/iStock)

Does Travel Insurance Cover the Coronavirus?

One of the many things that COVID-19 has taught us is to always consider buying a travel insurance policy. If you bought travel insurance for a trip you have to cancel during the travel bans, you may or may not be covered. Here's how to protect yourself now and on future trips.

travel insurance

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After a lot of thoughtful deliberation, for the first time in my life I decided to postpone an international trip because of COVID-19. I’ve been traveling problem-free for three decades, but a few of my international trips have gone sideways of late: I was stranded in Chile for three days due to a grounded ferry and subsequent airline strike, forcing a chain reaction of expensive new flight and lodging logistics. Last summer, on a flight home from Bogotá, Colombia, I was delayed for almost 24 hours due to weather and mechanical issues and had to pay additional expenses for hotels, meals, and transportation.

But the scariest incident was in Sweden last fall when I almost lost the vision in my left eye.

My eyesight had been disappearing quietly over the course of a week. I had no pain, just a slowly creeping blind spot that was cannibalizing my peripheral vision. I was having fun at a conference and ignoring the issue until I walked across a busy street in Göteborg and was almost run over by a train. That’s when I called my sister, a physician in the U.S., who told me I likely had a detached retina, that I was in danger of losing the vision in my left eye, and that I should get myself to a hospital immediately.

I took her advice. In the emergency room, a doctor confirmed my sister’s suspicions and sent me upstairs to start prepping for surgery, which was now scheduled for early the next morning. During the procedure, the surgeon replaced my eye’s viscous fluid with hydrogen gas, and afterward, he told me that I wouldn’t be able to fly for at least three weeks until the gas naturally dissipated. If I did fly, he explained, the gas would expand and destroy my newly reconstructed eye.

I panicked when the doctor told me that I needed immediate surgery. But as far as medical disasters abroad go, I hit the jackpot. I was among friends in a developed nation, with an excellent hospital where a top-notch surgeon performed a successful operation. Post-op, my cousin, who lives nearby, invited me to stay with her family for five days, spoiled me with home-cooked meals, and found me a quiet and inexpensive cottage rental within walking distance of her house where I could slowly recover.

All went as well as it could for a mishap far from home. But if I hadn’t bought an insurance policy through AIG Travel before I left, I would have been out nearly $13,000. That’s peanuts compared to how costs often balloon during an emergency abroad. And now as the world shuts down as a result of COVID-19, travelers are scrambling to cancel trips. 

We travel to expand our lives, not to fret about all the bad things that can happen to us while we’re away. But with the rise of COVID-19, there’s never been a better time to get savvy about insurance. 

According to the U.S. Travel Insurance Association, a Washington, D.C., nonprofit trade group, Americans spent nearly $3.8 billion on travel protection in 2018, an increase of 40.9 percent from 2016. Over the same period, the number of travel-protection plans that were sold increased by 36.5 percent. Since January 21, 2020, according to the travel-insurance-comparison website InsureMyTrip, there’s been a 60 percent increase in sold policies that include a “cancel for any reason” benefit.

There are many reasons for the additional expenditures on travel insurance. According to the International Air Transport Association, in 2016, there were 3.8 billion air travelers, a number that is predicted to increase to 7.2 billion by 2035. This increased global movement has contributed to more congested airports and travel delays, in addition to a significant rise in the spread of disease outbreaks, as evidenced by COVID-19. Also, natural disasters have quadrupled in number and magnitude between 1970 and 2017, which has resulted in delayed flights or cancelled trips. (But there is some good news for travelers: according to the Global Terrorism Database, the total number of terrorist attacks worldwide decreased 43 percent between 2014 and 2018, and the total number of deaths by terrorism decreased 48 percent.)

These threats are scary, but the reality is that, before COVID-19, usually most people’s trips were interrupted for much simpler reasons—broken bones, appendicitis, sprained ankles. “The highest-volume health mishaps are the most boring ones,” says Bill McIntyre, director of communications for Global Rescue, a New Hampshire–based travel-membership organization that provides medical, security, evacuation, travel-risk, and crisis-management services. “Traveler’s diarrhea is number one by far.” In terms of security risks, says McIntyre, muggings are the most common. 

“You may be very young and healthy, and situations can still happen to you,” says Scott Adamski, head of U.S. field sales for AIG Travel. “There has always been civil unrest, earthquakes, and fire, but it’s impacting more people because more people are traveling.”

travel insurance
Accidents, medical costs, and flight delays while traveling can get expensive if you don’t have the right insurance. (Jovanmandic/iStock)

And if you engage in what insurance companies deem “extreme” activities, the odds of an accident may increase. Alastair Swinton, a 30-year-old mountain guide who works in the European Alps, went on a climbing expedition last September to Mount Koyo Zom, a 22,546-foot technical peak in the Hindu Raj range of Pakistan. Swinton fell about 65 feet into a crevasse, sustaining head and leg injuries. His climbing partner pulled him out and made an SOS call to the organization Global Rescue. The duo’s communication device died during the evacuation process, but the helicopter still found the climbers a day later.

“It was very surreal that somebody from Global Rescue knew where I was, knew how to get into contact with me, and knew which hospital I was in,” says Swinton. “Global Rescue is almost like a guardian angel looking over you. They manage to find you when you think you’re all alone.”

Luckily, I didn’t need to get pulled out of a crevasse and evacuated in Sweden. While the AIG travel-insurance policy I purchased covered my medical expenses and return flight, it did not cover almost $1,000 in meals, transportation, and Airbnb costs during my three-week recovery period. The response after I submitted my expenses was: “Unfortunately, the Trip Delay benefit does not provide coverage [for these items] due to an illness or injury of the insured on this policy.”

After reading the fine print on my policy, I realized that trip delay in travel-insurance parlance refers to delayed travel due to inclement weather or an airline strike. There was no category for living expenses incurred while recovering from surgery. That’s nothing compared to the experience of a fellow traveler from Minnesota: while in Peru last September, he cycled off a cliff, broke both ankles, and had to be airlifted out, then flew to the U.S. for emergency surgery. Seven months later, he’s still trying to recoup an estimated $75,000 in out-of-pocket expenses from a different insurance company.

As for COVID-19, it’s important to know that no travel-insurance policy covers fear-based cancellations, i.e., bailing on a trip because of concern that you will get sick, unless you have bought a cancel-for-any-reason rider, a time-sensitive benefit on some plans that allows a traveler to call off a trip for any reason up to 48 hours prior to the scheduled departure. But like the airlines today, who are changing their cancellation and change fees at this time, some insurance companies are now doing the same.

From viruses to natural disasters, here’s how to make sure you’re covered for anything that might come your way while traveling. 

What to Know Before You Buy Travel Insurance

Check your primary health-insurance policy first. Most domestic policies offer some coverage for international emergencies, for things like broken bones, appendicitis, and illnesses and accidents that require immediate medical attention. But it may not be enough to cover your entire bill or to get you home. If you were to go on a trip and contract COVID-19 or be quarantined, some domestic policies would consider that a medical emergency and cover a percentage of the cost of your care and the logistical expenses of being quarantined. But policies vary, and it’s imperative to talk to an agent at your insurance company to see what’s covered before traveling. Depending on the state in which you reside, Blue Cross Blue Shield offers international protection through GeoBlue, a supplemental policy that provides up to $1 million in medical and up to $500,000 in evacuation costs for international travel. To be insured with GeoBlue, you don’t have to have domestic Blue Cross Blue Shield coverage, but you do have to provide proof that you have a primary health-insurance policy. 

Look into what your credit cards cover. Some credit cards come with medical protection plans while traveling abroad. It’s the exceptional one that offers extensive medical or evacuation coverage. One of the best is the American Express Platinum Card, which offers $20,000 for emergency medical expenses and $100,000 for emergency transportation if you paid for your plane ticket (and other travel expenses, like your hotel) with the card. It’s important to call a representative at your credit-card company to ask about its policy for COVID-19. Some premium card policies may cover the cost of your trip if a cancellation is mandatory—for instance, if it’s based on a government-enforced travel ban—but likely not due to cancelling out of fear of contracting the virus.

Here’s the deal with insurance offered by airlines when buying a ticket. When booking a flight, many airlines offer travel insurance through a third party, such as AIG Travel or Allianz Travel, for an upcharge of roughly 10 percent of the cost of the flight. This protection generally covers a flight refund if you can’t travel, reimbursement for lost luggage, and rebooking costs for flight cancellations or missed connections. Given the current COVID-19 situation, many airlines like Alaska, American, Delta, and Jet Blue have announced varying policies that waive or suspend change and cancellation fees within a given time period. Take note that airline insurance is not a health-insurance policy. If you want to cover all your bases, investigate a more comprehensive policy.

Learn the Difference Between Travel Insurance and Travel Memberships

Travel insurance is an umbrella term that generally covers a carefully calibrated portion of medical expenses, trip cancellations, lost luggage, flight accidents (an accident that occurs while on a licensed commercial flight), evacuation due to natural disasters, and other losses incurred while traveling. The list of companies offering these policies is long: AIG Travel, Allianz Travel Insurance, IMGRipcord Rescue Travel Insurance, and others. Most of these offer comprehensive packages that cover all of the above, as well as à la carte coverage options for medical reasons, trip cancellation, and other things. The price of and protection provided by each policy varies and can be based on the age of the traveler, the state in which the traveler lives, the cost and duration of the trip, the destination country, and when the traveler buys the policy in relation to purchasing the trip. 

COVID-19 has opened a massive can of worms, because it became what’s called in insurance parlance a “known risk” to travelers as of roughly January 21. (The known-risk date varies per company.) For those who purchased a policy after January 21, cancellations due to the virus may not be covered. AIG Travel still encourages travelers to file a claim because some policies may provide coverage depending on the exact reason for cancellation. And as the virus spreads, some companies, like Allianz, are altering their policies to include coverage of COVID-related medical and cancellation claims.

A rep for IMG, the travel-insurance company I was using for my postponed trip, told me when I inquired about costs associated with COVID-19 that they are considering this on a case-by-case basis and evolving global circumstances. “There are no inclusions in the policy for quarantines,” the rep said. “If you were to get quarantined or sick, you need to pay up front and file a claim for reimbursement.”

These variables are why it’s so important to read the fine print and ask an insurance agent a lot of questions to find out about any exclusions.

It’s also important for Outside readers to know that many travel policies do not cover extreme sports, which can include activities like scuba diving, mountain biking, or climbing with ropes. If a travel-insurance company does offer an adventure or extreme-sports rider, the traveler may live in a state in which laws prevent it from being sold. “Some travel-insurance coverages may not be offered in specific states,” says Julie Loffredi, the media-relations manager for InsureMyTrip. “This may be due to state law or to the travel-insurance company simply not selling that type of plan in that specific state, for whatever reason.”

For my postponed trip to Antarctica that would've involved rock and ice climbing with ropes, I researched four insurance companies before I found one that offered the coverage I needed. The first didn’t offer mountaineering coverage, the second didn’t offer coverage in the polar regions, and the third offered both, but the mountaineering coverage was not available to Minnesota residents, where I live. I finally found what I needed through IMG’s Patriot Platinum International policy. Ripcord Rescue Insurance also specializes in policies for travelers undertaking potentially risky endeavors, like mountain climbing in remote countries. Even if you have an inkling of a plan to rent a mountain bike for a day, you’ll likely want to buy an extreme-sports rider.

Most travel-insurance policies are available up to 24 hours before departure, but it’s smarter to buy a policy within 14 to 21 days of making a trip purchase or deposit. Be sure to pay extra for the Cancel For Any Reason rider, which usually provides reimbursement of 50 to 75 percent of the prepaid, non-refundable trip cost. With the insurance and the rider, you’ll be covered if you need to cancel a trip due to pre-existing conditions, illness (your own or a family member’s), natural disasters, COVID-19, or any other reason you may not want to get on a plane. 

“A lot of younger travelers say, ‘I’m in perfect health, so I don’t need to worry about preexisting conditions,’” says AIG’s Adamski. But, he adds, if they don’t buy insurance within the 14-to-21-day window and their mother gets sick due to a preexisting condition and they have to cancel, they may not get refunded for the cost of the trip.

Travel memberships from companies like Global Rescue and MedJet offer medical evacuation and act as a supplement to your medical coverage. Some insurance policies already offer medical-evacuation insurance, but if you’re a frequent traveler to remote locations, this additional annual membership may make sense. Global Rescue’s McIntyre explains it this way: “We’re kind of like AAA for your car. We’ll tow your car to the garage, but we’re not going to have your carburetor replaced.”

Sign up for a one-time or annual Global Rescue membership and you’ll receive security, evacuation, and travel-risk and crisis-management services. It provides a highly trained expert who will walk you through a crisis and who will also arrange to evacuate you from a dangerous or emergency medical situation, but it won’t pay the hospital bills. The basic annual travel membership ($329) gives Global Rescue clients medical-evacuation service to the hospital of their choice. For an additional $326, Global Rescue offers a security upgrade that extracts members in danger of bodily harm from war, civil unrest, natural disasters, government-evacuation orders, and other security emergencies.

But it’s important to read the fine print here, too: Global Rescue evacuation is not available above the 80th parallel north or below the 60th parallel south, which means that if you’re planning a polar cruise, look elsewhere for evacuation. Also by law the company is prohibited from transporting people with infectious diseases, like COVID-19. If you were to be quarantined because of an infectious disease, the membership provides advisory services (like medical and security referrals) wherever you happen to be. 

What to Do if a Trip Goes Sideways

Even if you think you have the situation under control, immediately call your insurer and tell them what’s happening. Insurance and travel membership companies have a 24/7 international phone line and a trained medical team on staff who can help you navigate how to quickly get help. At the point of first contact, they will open a file and monitor your progress until you safely reach home. “There are a lot of things that go into a medical situation,” says AIG’s Adamski. “Let’s say you are with family or a traveling companion. Do they stay with you? Do they have to change their flight back to the U.S? Do they need cash? How will they get cash?” he says, noting that the most comprehensive policies will cover these costs. “We help facilitate all of these things. If customers don’t call us first, it becomes more challenging to assist if the policyholder has already involved other parties.”

Keep immaculate records of receipts. Without proof of payment, you won’t get reimbursed, which is why it’s a good idea to go overboard on documentation and keep track of all expenses as they are accrued, rather than trying to track them down retroactively at home. During my eye mishap in Sweden, I paid for my emergency-room visits and follow-up appointments via credit card. My only proof was the credit-card receipt with the name of the hospital printed on top. That wasn’t good enough for the insurance company. I still needed documentation from the surgeon and the hospital stating that I was being treated for a detached retina. It took half a dozen phone calls to the hospital in Sweden from the U.S. to find the appropriate person who was able to retroactively get me the receipt—which he had to send via snail mail—and delayed reimbursement by a month.

Take a few deep breaths. Having an emergency away from home is never fun, but it does offer a unique glimpse into the inner workings of a foreign culture, not to mention a hell of a story to tell your friends.

*This story has been updated to reflect the current news.