The COVID-19 pandemic has caused many concerns when it comes to insurance claims. Just as many business owners have filed business interruption claims due to government mandated stay-at-home orders and business closures, so too have many travelers filed claims with travel insurers over cancelled or postponed trips. While insurance claims can be difficult enough to navigate under “normal” circumstances, the ongoing pandemic has made them that much more complex. Because of this, it’s important to know what is and isn’t covered under most travel insurance policies when it comes to COVID-19.
COVID-19 Travel Insurance Claims
Although most travel insurers have excluded COVID-19-related claims due to the virus’s status as a pandemic event, some insurers are adopting the pandemic into their policies. However, despite pandemic coverage being potentially available in certain specific instances, it isn’t available as a catchall triggering event.
What is Covered?
Most travel insurance policies are “named perils” types of policies. This means that in order for coverage to exist, a certain event or “peril” must occur. Given that COVID-19 is highly unlikely to be listed as a named peril, some other portion of the policy must provide coverage.
The most likely named perils to provide coverage for a COVID-19 cancellation or delay are below.
Sickness, injury, or death of the traveler or a travel companion: This is the simplest path to coverage. If it can be shown that the traveler, or someone traveling along with them, contracted the virus and became ill within the specified time period in the policy.
Quarantine: Most policies provide coverage if the traveler was “quarantined.” A quarantine is generally defined as meaning “to isolate from normal relations or communication.” The Code of Federal Regulations defines “quarantine” to mean “the separation of an individual or group reasonably believed to have been exposed to a quarantinable communicable disease, but who are not yet ill, from others who have not been so exposed, to prevent the possible spread of the quarantinable communicable disease.” In many circumstances, a traveler to a country or another state would be required to self-isolate for 14 days (or another specified time period). This may be considered a “quarantine” triggering coverage.
Natural disaster: There is ongoing litigation as to whether COVID-19 constitutes a “natural disaster.” This is another common named peril in travel insurance policies. If COVID-19 is deemed a “natural disaster,” and a trip was cancelled or altered because of it, this could be a pathway to coverage.
What Isn’t Covered?
Travel insurance companies are consistently denying coverage if the following instances were the impetus for the cancellation or delay:
Countries With Level 4 Travel Advisories: In the event a Level 4 Do Not Travel advisory is issued by the U.S. Department of State for a specific country to which an insured has planned to travel, they will not qualify for coronavirus-related coverage. This is due to the potential surging of cases in various countries unexpectedly, as the list of Level 4 countries is constantly changing. Prior to booking a trip and purchasing a travel insurance policy, it’s important to ensure that the country to which you are traveling does not have a Level 4 advisory.
Fear of Contracting COVID-19 While Traveling: In the event the insured is fearful of contracting COVID-19 while traveling and subsequently cancels a trip, coverage will not be provided. If the insured wants ultimate flexibility to cancel a trip no matter the reason, a Cancel For Any Reason, or CFAR, supplemental upgrade, is offered in some travel insurance plans; however, most travel plans do not offer CFAR as an option.
Travel Insurance Denials and COVID-19
Despite some travel insurers now planning to offer COVID-19 coverage, many are likely to still deny valid claims. The COVID-19 pandemic has heavily impacted millions of these travelers who have had to cancel or postpone travel plans due to both the virus’s impact and government travel restrictions. This has resulted in countless flight cancellations as well as canceled reservations at hotels, resorts, spas, and Vrbo or Airbnb reservations.
Even for those travelers who purchased travel insurance, the coverage has provided little to no reimbursement. Many travel insurers have simply adopted a company-wide policy not to pay for pandemic-related claims entirely. However, in the event a valid travel insurance claim has been disputed, underpaid, delayed, or denied, the insured could still be entitled to compensation.
Texas Travel Insurance Claim Denial Attorneys
The COVID-19 pandemic has caused an influx of insurance claims to be filed in relation to business closures, as well as cancelled or postponed trips due to government-mandated stay at home orders and other quarantine measures. Unfortunately, many insures have chosen to underpay or flat-out deny valid claims entirely. At Raizner Law, we understand the frustrations travelers are facing. If your travel insurance claim has been underpaid or denied by an insurer, we can help you to pursue legal action in order to receive full monetary compensation. Contact us today for more information on how we can help.