Standard travel insurance won't cover coronavirus-related disruptions

Tallinn Airport.
Tallinn Airport. Source: Taavi Eilat/ERR

Insurance that will cover voluntary travel cancellations is expensive and not purchased by most travelers, however in the case of standard travel insurance, insurers will not compensate losses incurred in connection with an epidemic or the quarantine of specific areas.

In addition to China, the novel coronavirus (COVID-19) has also reached several European countries, and the more cases are reported, the more situations arise in which people cancel planned trips or have to take into consideration when traveling to affected areas that they may end up there for longer than planned in case they fall ill or are quarantined.

Estonian Insurance Association (EKsL) board member Andres Piirsalu told ERR that travelers typically sign up for travel insurance that will cover medical expenses in the event of unexpected illness.

If someone has also taken out a travel cancellation insurance policy, then the extent to which it will cover losses will depend upon the extent of the policy they took out.

"If someone decides to cancel their trip out of fear of the virus, insurance will cover the costs of the canceled trip if the policyholder has chosen the appropriate insurance coverage," Piirsalu explained. "As coverage for voluntary cancellations typically makes travel insurance more expensive in general, then as far as we know, people don't typically purchase such policies."

Insurance companies are advising those who have travel planned in the near future to review their travel insurance policies as well as consult with their insurers.

According to Piirsalu, if someone is already on a trip to an area that ends up quarantined, preventing them from returning home on schedule, losses incurred as a result will typically not be covered under a regular travel insurance policy.

"Under travel insurance practices, losses incurred in connection with an epidemic or the actions of public authorities are not covered," he noted.

Travel at one's own risk not covered

If Insurance personal insurance product manager Kairit Luht said that If will not pay compensation in cases where losses were caused by a nationally declared epidemic, with the exception of travel cancellation compensation used to cover additional expenses incurred in returning to Estonia.

"The aforementioned exclusion likewise won't apply to medical care insurance if an insured event occurred within 14 days of the outbreak of an epidemic and the insured was already traveling prior to the outbreak," she said.

Much depends on when exactly a quarantine is imposed or when the Ministry of Foreign Affairs has issued a travel advisory, as according to Luht, additional expenses incurred on accommodations and returning to Estonia will only be covered in the event that an outbreak has begun or a quarantine imposed after one's trip already began. These expenses will not be covered, however, in the event that someone has traveled to an area regarding which the ministry has already issued a travel advisory, as in that case, the insured has traveled there at their own risk.

Seesam Insurance travel insurance product manager Jonatan Jõks said that when purchasing a travel insurance policy from them, it is possible to purchase additional extended coverage or coverage for voluntary travel cancellation as well.

"Expenses incurred as a result of the cancellation of a conference are eligible for reimbursement if the insured has signed up for extended coverage," Jõks explained. "This covers not only events cancelled as a result of the virus but also other cancelled events and risks such as natural disasters, strikes, terrorism, etc. Potential costs incurred as a result of ending up in quarantine are likewise only eligible for reimbursement under extended travel cancellation coverage."

If a traveler has only signed up for basic travel insurance, Seesam doesn't consider either of these situations to be an insured event. Purchasing a policy including voluntary travel cancellation coverage, however, will allow for a traveler to receive partial compensation for a trip canceled out of fear of the virus.

According to Jõks, such a policy can be used for other reasons as well, and it will cover 70 percent of the policyholder's expenses otherwise not recoverable from hotels, airlines or other service providers. "But this coverage can only be purchased within two weeks of purchasing one's trip, no later," he added.


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Editor: Aili Vahtla

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