Someday in the not-too-distant future, you’ll once again be able to make your family vacation ideas a reality and head out to the best family vacation spots in the U.S.—maybe even to Europe, Asia, or the Caribbean. And once you make the decision to travel again, you should pay special attention to your travel insurance options.
Even before COVID-19 added new risks to travel plans, it would have been wise to consider four main financial risks that family travel insurance can help you avoid:
- Loss of nonrefundable prepayments or cancellation penalties if you, another member of your family travel group, or a close family member remaining at home encounters unexpected sickness or accident. This risk is covered by trip-cancellation insurance (TCI).
- Extra expenses of an early return if you have to curtail a trip you’ve already started for one of the same reasons you might cancel (trip interruption insurance, or TII). Travel insurance policies almost always combine TCI and TII.
- Expenses for medical treatment or emergency evacuation if you become sick or suffer an accident in a destination where your regular health insurance doesn’t provide full coverage.
- Expenses of unforeseen delays at any time during your trip.
But COVID-19 has changed the ground rules. Travel insurance designed for normal times may not cover all your family’s risks in this pandemic.
Travel Insurance and COVID-19: What You Need to Know
Almost all family travel insurance provides financial coverage only for unforeseen risks. These days, COVID-19 is a foreseeable risk just about anywhere. Also, most travel insurance is “named peril” insurance: If a contingency is not specifically included in the fine print as a “covered reason,” the policy doesn’t cover it. COVID-19 also poses three unique risks that are covered by some policies, but not all.
1) Catching COVID-19 at your destination
Standard travel medical policies cover medical costs of getting sick at your destination, but some insurers can deny coverage because catching COVID-19 is not an unforeseen risk. At least one new policy, from Seven Corners, explicitly lists “catching COVID-19” as a covered reason, and some other policies are also specifically covering it. But it would be a mistake to assume it is a covered risk.
2) Getting quarantined at your destination
An unexpected extension of your trip can pose a big financial burden. Some TII policies include “quarantine” as a covered reason; others do not.
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3) Canceling a trip because of an upsurge of COVID-19 at your destination
Many policies don’t cover destination epidemics/pandemics at all as a covered reason to cancel. Some don’t even cover prepaid arrangements when your airline, hotel, or cruise line cancels before you do. “Cancel for any reason” policies, typically available as extra-cost options, let you, rather than an insurance company bean-counter, decide whether you want to continue or cancel a trip. But those policies generally recover no more than 50 to 75 percent of your prepayments.
COVID-19 Trip Insurance Coverage: Read the Fine Print
A basic problem with COVID-19 risks is that some insurance fine print hasn’t caught up with the virus, so you can’t rely on an online comparison table to give you the answers.
Instead, this is one of those times when you need to buy your insurance through a specialized travel insurance agency and to go over exactly what you need with a qualified agent. Over the years, we’ve recommended Quotewright.com, Squaremouth.com, and InsureMyTrip.com, but there are others, including G1G, Global Travel Insurance, and TravelersMed.com that would be appropriate in this case as well.
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Bottom line: If you’re planning a trip in the pandemic era and you can’t afford to risk your entire vacation budget in the event of an unexpected emergency, you’ll want to consider travel insurance. But not just any off-the-shelf travel insurance. Work with a qualified agent at a specialized insurance company to the exact level of coverage you need.