Travel Insurance Might Not Cover COVID-19 — Unless You Upgrade
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When traveling during the COVID-19 era, it can make sense to have travel insurance. These days, trips have been canceled for all sorts of COVID-19-related reasons, beyond actual illness, such as disinclination to travel if cases spike or government restrictions that prohibit you from traveling at all.
Given the myriad of pandemic-era travel challenges, springing for travel insurance seems like a smart choice.
But standard travel insurance plans might not actually cover all pandemic-related trip problems.
What most travel insurance plans cover
Most travel insurance plans — including those offered as a complimentary benefit with certain credit cards — cover you to some degree if you can prove that either you, a covered travel companion or possibly someone you need to care for contracted COVID-19.
Within the umbrella of travel insurance, coverage can look a lot of different ways. Trip cancellation coverage is there if you cancel a trip because you got sick prior to departure. Trip interruption coverage can cover you if something happens in the middle of your trip, such as testing positive and needing to stay longer to quarantine. If your policy includes travel medical coverage, expect reimbursement for health care expenses if you become ill with COVID-19 while traveling abroad.
The thing is, getting sick isn’t actually the reason why many travelers aren’t able to go forth with their trip.
» Learn more: The majority of Americans plan to travel this year, according to recent NerdWallet study
What most travel insurance won’t cover
Most policies explicitly do not cover travel impacted by restrictions or travel warnings issued by any governmental body or health authority. Fear of COVID-19 problems (whether it’s getting stuck somewhere or getting sick yourself) is also typically not a covered reason.
For example, “Trip cancellation that is due solely to concern or fear of travel related to an epidemic or pandemic, including COVID-19, is not covered,” according to travel insurance provider AIG.
Meanwhile, “claims due to known, foreseeable, or expected events, epidemics, government prohibitions, warnings, or travel advisories or fear of travel are generally not covered,” according to a statement from Allianz Travel Insurance.
And most insurance policies state that COVID-19 — and any issues that arise from it beyond you actually getting sick — is a known event.
“COVID-19 became a known event on Jan. 22, 2020, and was recognized as an epidemic as of Feb. 3, 2020,” according to Allianz Travel.
Sure, you might not know when the next variant might appear — in turn, prompting countries' borders to be shut down. And you might not know if quarantine requirements will be reinstated in the country you're traveling to — turning your week lying on the beach into a week staring out a window at the beach. But since COVID-19 is a known event, many policies won’t cover such scenarios.
Even two years into a pandemic, it’s not surprising to find yourself surprised. Beyond needing a COVID-19 vaccine to travel to many countries, some places have recently begun requiring boosters, too. And in the wake of the omicron surge, many countries that had been previously reopened to tourists were then shut down again.
Yet many general travel insurance plans will not cover your trip for those types of updates to restrictions. That is, unless you have the right kind of travel insurance.
Types of travel insurance that cover COVID-19 issues (beyond actually getting sick)
Every individual policy is different, but generally speaking, you’ll need to purchase a travel insurance policy that specifically covers COVID-19-related challenges. For even more comprehensive coverage, purchase Cancel For Any Reason, which — like it sounds — gets you some money back no matter the reason why you want to abandon your trip.
Note that these plans are typically sold as second plans or as add-ons to existing plans.
Specific epidemic coverage
Some insurers have begun offering more COVID-19-specific coverage, such as the Epidemic Coverage Endorsement offered through Allianz Global Assistance, which is slightly more comprehensive than your standard policy.
For example, you might not necessarily have a positive COVID-19 test result, but the airline won’t let you board because they scanned your temperature for fever, and it was too high. This level of coverage would come to your rescue.
But even an epidemic-specific policy might be insufficient. For example, Allianz’s Epidemic Coverage Endorsement won’t cover common issues, such as failing to show a required negative COVID-19 test to board a flight (maybe you took the test, but the results didn’t come back in time). It also doesn’t cover travel restrictions that apply broadly to some segment or all of a population, such as a certain country banning all American travelers from entering, period (as some did during the recent omicron surge). For those situations, you’ll need Cancel For Any Reason coverage.
Cancel For Any Reason coverage
No matter your reason, you can cancel your trip with Cancel For Any Reason coverage, or CFAR, which is typically offered as an add-on to travel insurance policies. With it, you’re covered for all the reasons that other policies won’t cover. Exact terms vary by provider, but expect a partial reimbursement (typically 50% to 75% of prepaid nonrefundable trip plans, according to the National Association of Insurance Commissioners).
The trade-off is that this added coverage can be pricey. CFAR coverage usually will cost about 6% to 12% of overall trip expenses, according to the U.S. Travel Insurance Association. Contrast that with standard trip insurance without this add-on, which typically costs about 4% to 8% of the total cost of a trip.
And note that even with it, you typically don’t get a full trip refund.
The bottom line
Don’t assume that merely having travel insurance will ensure you get money back on a canceled or interrupted trip. Most policies have a long list of exclusions, so read the fine print to ensure you’re covered for everything you intended to be covered for.
For COVID-19-related reasons to cancel that don’t actually involve getting sick — like border shutdowns, a vaccination requirement that makes you ineligible for travel or a mere disinclination to travel — you’ll likely need a more comprehensive policy.
And with that, be prepared to pay more.
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:
Flexibility, point transfers and a large bonus: Chase Sapphire Preferred® Card
No annual fee: Bank of America® Travel Rewards credit card
Flat-rate travel rewards: Capital One Venture Rewards Credit Card
Bonus travel rewards and high-end perks: Chase Sapphire Reserve®
Luxury perks: The Platinum Card® from American Express
Business travelers: Ink Business Preferred® Credit Card