Covid cancellation clause

Prior to Covid, pandemics and disease outbreaks were specifically excluded from most travel insurance policies as they were deemed too ‘high risk’ or too difficult to price for given their unpredictable nature.

But in the aftermath of the pandemic, the majority of insurers do now offer medical cover for travellers who contract Covid along with cancellation cover in some instances.

However, a little-known clause could affect Australian travellers affected by Covid.

Introduced by insurers such as Cover-more and Easy Travel insurance, the clause could affect your ability to claim on the full cost of your holiday (should you catch Covid).

Natalie Ball, director, Comparetravelinsurance.com.au explains,

“Several insurers offer cancellation cover for your prepaid deposits and costs should you catch Covid before or during your trip. However, there is a caveat that some brands have applied to policies purchased within 21 days of your departure date. In this instance you may only be able to recover costs incurred after your policy purchase date.”

Ball says customers that had purchased a policy prior to those 21 days would be covered up to the full cancellation benefit listed on their policy.

“If you purchased your policy ahead of time or prior to the 21 day period, you would be eligible to claim on all your prepaid and non-refundable travel expenses, regardless of when they were made. Buying cover too late is where travellers are getting stung.”

Ball notes that the key to avoid getting caught out is to buy travel insurance as soon as you’ve booked your trip.

“The way this clause works is to deter you from buying travel insurance too late. So say for example, if you pay for your Christmas holiday flights in October, but only buy travel insurance in December, you wouldn’t be able to claim back those flight costs should Covid force you to cancel.”

On the flip side, any bookings made after buying travel insurance would be claimable.

“Following this example, if you were to pay for your accommodation after purchasing travel insurance, you would be eligible to claim back those costs. So be mindful that if you book your holiday ahead of time, it really does pay to buy travel insurance early.”

Cover is key to peace of mind

A common misnomer is that the earlier you buy travel insurance, the more expensive it is.

“This is not necessarily the case,” notes Ball. “Buying travel insurance ahead of time may cost you a bit extra in the short term but it can save you a great deal more in the long run. Buying travel insurance in advance allows you to maximise your coverage as benefits activate at the purchase date, not your date of departure.”

Should you need to cancel in the lead up to your holiday you’re likely to save far more than what you’d be spending on a policy, adds Ball.

“A basic policy starts at about $10-$20 per day. When you compare that to the thousands of dollars spent on a typical overseas trip, travel insurance is a no brainer.”

Lastly, Ball notes that insurers usually offer Covid cancellation cover as an add-on extra, which is worth considering in certain instances.

“With rising airfares and travel costs, paying for that added peace of mind may be an expense worth taking if your prepaid costs are in the thousands.”

Covid and travel: tips to stay virus free

• Get vaccinated: Getting fully vaccinated is the most effective way to protect yourself against Covid. Make sure to complete your vaccination series and wait for two weeks after your last dose to build up your immunity.
• Wear a mask: Wear a mask in all public areas, including airports, train stations, bus terminals, and on public transportation. Make sure your mask fits properly and covers your nose and mouth.
• Maintain social distance: Try to stay at least 6 feet away from others as much as possible, especially in crowded areas.
• Wash your hands frequently: Wash your hands often with soap and water for at least 20 seconds, especially after being in public areas or touching surfaces. If soap and water are not available, use hand sanitizer with at least 60% alcohol.
• Avoid touching your face: Avoid touching your face, especially your mouth, nose, and eyes, as the virus can enter your body through these areas.
• Avoid large gatherings: Avoid large gatherings or crowded areas, such as concerts or festivals, where it may be difficult to maintain social distancing.
• Check travel restrictions: Before traveling, check for any travel restrictions, quarantine requirements, or COVID-19 testing requirements in your destination or any transit points.
• Use contactless payment: Use contactless payment methods, such as credit cards or mobile payments, to avoid touching cash or shared payment terminals.
• Consider alternative transportation: Consider alternative transportation methods, such as driving your own car or using private transportation, to minimize exposure to others.
• Monitor your health: Monitor your health before, during, and after your trip. If you feel sick, stay home and get tested for Covid.

By following these tips, you can reduce your risk of contracting or spreading Covid while traveling. Remember, it's important to be mindful of others and take steps to keep yourself and others safe.