Coronavirus - Covid-19 - A Travel Insurance Guide

Last update: March 21, 2023

What Does Travel Insurance Cover?

Travel Insurance covers if you contract an unexpected illness, including Covid-19. Benefits can include Trip Cancellation, Trip Interruption, Medical Insurance, Medical Evacuation, and Trip Delay.

Travel insurance policies cover unexpected scenarios, like the illness or injury of a traveler resulting in cancellation. Or medical treatment if you fall ill or sustain an injury while traveling abroad. If a situation is foreseeable, travel insurance cannot cover it.

Travel insurance covers cancellation if a natural disaster makes your destination inaccessible or uninhabitable. However, this does not apply to biological pandemics. Outbreaks are neither geological nor weather-related natural disasters like hurricanes, floods, blizzards, earthquakes, and fires.

However, there is strong travel protection coverage for the majority of issues that customers with Covid concerns might encounter.

Trip Cancellation

Contract Coronavirus. If you contract the Coronavirus before departure or test positive through a PCR test, travel insurance can cover this situation under Trip Cancellation for an unexpected illness. Verification of a positive COVID test by a physician may be required (some insurers will allow it to be done via telemedicine or similar services).

Medical isolation. Medical isolation or quarantining means you showed symptoms of Covid or were exposed to someone who tested positive for it and forced into strict medical isolation to prevent the spread of disease. The orders must originate from a recognized government authority, their deputies, medical examiners, or physicians.

Most travel insurance covers cancellation for medical isolation under the Trip Delay benefit, but will not cover shelter-in-place, stay-at-home, curfew, or no-travel orders from local or state governments. Policies also do not cover medical isolation if your destination is already under quarantine or you must isolate upon arriving at your destination.

Level 4 travel advisory. Some policies include the option to cancel if your destination goes to a Level 4 alert (or higher) from the US State Department within 30 days of your departure date. The travel warning must occur for cities listed on your itinerary AFTER the effective your scheduled trip. However, the warning itself must be issued after your policy goes into effect. If the Level 4 alert is already in effect when you purchase the policy, you cannot cancel for this reason.

Trip Interruption

Trip Interruption covers you once you leave for your trip. It reimburses you for the unused portion of your trip costs and the cost to catch up to your trip, if you’re able, or return home early.

Unexpected sickness. If you become ill and require treatment for Covid-19 during your trip, travel insurance reimburses you for the unused portion of your trip.

Medical isolation. Like trip cancellation, medical isolation means you have or were directly exposed to someone who tested positive for Covid-19. Consequently, you are forced into strict medical isolation to prevent the spread of disease. The orders must originate from a recognized government authority, their deputies, medical examiners, or physicians.

For example, suppose you were on board a cruise ship when a highly contagious disease broke out. The cruise ship might force passengers to stay isolated in their cabins until disembarkation and you were unable to go on the on the island tour you booked.

Denied boarding. Travel insurance does not cover claims if a common carrier checks your temperature and then denies you boarding.

However, if you are running a fever when you wake up in the morning, go to the doctor first. If the doctor restricts you from traveling based on your health condition, travel insurance typically covers it.

Level 4 travel advisory. If a Level 4 advisory is issued DURING your trip for cities on your itinerary, several policies will allow you to cancel the remainder of your trip under Trip Interruption.

Medical Insurance

All insurers at AARDY cover Medical Treatment and Hospitalization Insurance for Coronavirus if contracted during the trip.

If you had Covid-19 in the past and recovered, travel insurance views it in the same way as a cold or the flu. If you had it and got over it and then got it again, it is not considered a pre-existing condition.

However, some people prefer to have a policy with a Pre-existing Condition Waiver just in case. The Waiver allows the policy to cover any pre-existing medical condition (including Covid-19) if you get it again.

Emergency Medical Evacuation

The Emergency Medical Evacuation benefit pays for your transportation to the hospital and back to the US.

All of AARDY's insurers cover Medical Evacuation and Medical Repatriation. AARDY also recommends having a Pre-existing Condition Waiver on your policy.

Trip Delay

Most of AARDY's policies all cover Trip Delays due to a covered injury or illness and unforeseen quarantine.

Quarantine is medical isolation as mandated by a physician or local authority because you have or are suspected of having an infectious disease.

If you contract Covid-19 during your trip, the Trip Delay benefit helps cover the cost of lodging, food, local transportation, and phone calls while you stay in a hotel. If you are hospitalized, the Medical Insurance could cover your hospitalization costs. However, different policies have different benefits for Trip Delay, so check in the policy for adequate Trip Delay benefits if quarantining is a concern.

What is Excluded?

While our travel insurance plans are comprehensive, they all have exclusions. Next, we discuss a few situations they do not cover for Cancellation or Interruption.

Travel canceled by the supplier. If your airline, cruise line, or tour company cancels your trip, travel insurance does not cover this. They are responsible for reimbursing you for the cost of the airfare because they initiated cancellation, and as a traveler, you are their customer. Failure to provide agreed-upon travel arrangements is an excluded circumstance in travel insurance policies. If the travel supplier cancels your arrangements and keeps your money, and does not offer any recompense, that can be a legal issue (fraud). Check with your local law enforcement for more information.

Pre-existing conditions that make you high-risk for Coronavirus. If your pre-existing medical conditions make you a high risk of contracting Coronavirus, travel insurance does not cover cancellation.

Trip Cancellations due to medical reasons are covered when a new or worsened condition develops after buying the policy. The circumstance itself must prevent your travel. It does not cover if your condition worsens, and the risk of Covid-19 makes travel inadvisable.

Coronavirus country closures. Travel insurance policies do not cover Trip Cancellation or Trip Interruption benefits if a government advises travelers not to visit specific countries because of the Coronavirus threat. The same holds for CDC travel warnings. If you feel uncomfortable traveling to a destination due to increased COVID activity, it is advisable to purchase a Cancel For Any Reason (CFAR) policy to cover this situation.

Travel insurance has standard Trip Cancellation and Trip Interruption benefits that rarely include travel advisories and warnings.

Some policies have Interrupt For Any Reason (IFAR) benefits that can allow you to cancel the remaining portion of your trip and return home early if you feel uncomfortable continuing the trip.

Closed borders. Trip Cancellation and Trip Interruption provide no protection if you plan to visit a country prohibiting foreign travelers' entry. You would need a Cancel For Any Reason (CFAR) policy for this situation.

Denied boarding of flight or cruise. If screeners refuse your boarding because you have a high temperature, you should seek medical attention immediately. Denied boarding to a flight or cruise is not covered.

Covid Testing. Travel insurance does not cover the cost of taking a Covid test. That cost is the responsibility of the traveler.

Screening delays. Travel insurance does not cover losses if you are late to your flight, tour, train, bus, or cruise due to health screening delays.

Rescinded visas. If you possess a visa no longer valid for a country closed due to Coronavirus, travel insurance cannot reimburse you for lost travel arrangements. Most Visa problems are not covered by travel insurance unless there is a documented theft of a passport or visa.

Canceled flights, tours, hotels/rentals, and cruises. If you cancel your trip due to fear of Coronavirus, travel insurance coverage is limited. It does not reimburse you for the cost of your flights, hotels, tours, cruises, or other travel arrangements lost unless you cancel for a covered reason or have a Cancel For Any Reason policy (see policy specifics for the least of applicable rules with CFAR policies).

Some policies cover bankruptcy/default of airlines, cruise lines, and tour operators. Check your policy to find out if it is covered. Travel insurance cannot protect you from travel agencies/booking companies that file for bankruptcy or go out of business.

Closed beaches or attractions. Travel insurance does not cover your loss if the beach or attraction you planned to visit is closed due to an outbreak or “shelter in place” order.

Lack of vaccine. Travel insurance does not cover cancellation if you have not received all doses of your Coronavirus vaccine, even if required by travel suppliers.

Covid/PCR tests. Travel insurance does not pay for the cost of a COVID test required for travel. Nor does travel insurance reimburse you if you do not take a COVID test and are denied travel.

Solution: Cancel For Any Reason

As mentioned previously, if you are concerned about any of these situations, we recommend getting a Cancel For Any Reason travel insurance policy.

Note: CFAR policies are not available in every state

Cancel For Any Reason covers the situations above, except for the travel supplier failing to provide the agreed-upon service.

Typically, Cancel For Any Reason plans require that you buy travel insurance within 10-21 days (depending on policy) of your Initial Payment or Deposit Date:

• AIG Preferred and Deluxe– within 14 days – 50% CFAR benefit
• AIG Plus– within 21 days – 50% CFAR benefit
• AXA Platinum – within 14 days – 75% CFAR benefit
• IMG Travel LX– within 20 days – 75% CFAR benefit
• Seven Corners– within 20 days – 75% CFAR benefit
• Travelex Select – within 15 days – 50% CFAR Benefit
• Trawick First Class– within 10 days – 75% CFAR benefit
• Trawick Voyager– within 21 days – 75% CFAR benefit

Cancel For Any Reason plans also mandate covering 100% of all prepaid, non-refundable trip expenses. If you know you will buy airfare later but don't know the cost, you must add it to your policy within a few days of each subsequent purchase.

To use your CFAR benefits, you must cancel your trip 48 hours or more before

They are all similar but slightly different. Review the policy very carefully before assuming your travel insurance policy covers something.

What Are My Options If My Policy Does Not Have Cancel For Any Reason?

Suspend Your Travel Insurance Policy. If you cannot travel as planned, call AARDY to change the travel dates on your policy before the original Departure Date. All of our carriers permit date changes due to Coronavirus cancellation. Suspension allows you to keep your plan and use it again later.

Even if you do not have a future trip planned, our carriers allow you reuse the policy within 12 - 30 months if you contact us before the original departure date. We can change the dates for now, and when you have plans, just notify us to update your policy.

Ask for a Voucher. Some travel insurance companies, such as AIG, will cancel your existing policy and issue you a voucher to use on a future trip. Typically, you must take another trip typically within 24 (depending on insurer) from your original purchase date. More about this later in the article.

Reschedule. If your travel arrangements allow you to reschedule your trip, it might make more sense to travel at a later date. Call AARDY to find out if you can change the dates of your new trip.

Cancel. Your existing policy may permit cancellation within 10-15 days of purchase and provide a full refund. This is called the Free Look Period. If you are still within the 20 to 21 day period following your Initial Trip Deposit, you could purchase a Cancel For Any Reason plan instead with several carriers.

Before you request a date change, make sure you have not made a claim and do not intend to file a claim. If so, the insurance carrier will not allow you to change the dates and reuse the plan for a future trip.

Take your chances. If you choose to travel anyway, make sure you have Trip Interruption, Medical Insurance, and Medical Evacuation if you become sick or injured during the trip.

How Do I Get Covered?

You can purchase travel insurance anytime until the day before departure. Even if you can't buy a Cancel For Any Reason policy, you benefit from Medical Insurance and Trip Interruption coverage, as well as Travel Delay benefits.

We always recommend that travelers purchase travel insurance shortly after making their Initial Trip Deposit. Then, you have access to all the time-sensitive benefits like Cancel For Any Reason and coverage for Pre-existing Medical Conditions.

You can set up a policy through the AARDY website or by calling our licensed agents at 650-492-6298.

What if I Have a Policy and My Trip Is Postponed? Can I Transfer My Policy?

Yes, you can reuse the policy if you did not file any claims against it. The carrier determines for how long you can reuse it.

Send an email to agent@aardy.com with your name and policy number. Also, note whether you need to provide new travel dates or desire a voucher, we will fulfill your request.

If you do not know what your new travel dates are yet, it's not a problem. We can move your travel dates into the future, so you have time to plan a new trip. Then, once you have confirmed your new travel dates, let us know, and we will amend your policy.

Notify us before your originally scheduled departure date. Suppose you contact us after the date your trip was scheduled to depart. In that case, the insurance company will require documentation that you did not take the trip. They determine exceptions on a case-by-case basis.

Free-Look Period - If you cancel your policy during the ‘Free-Look Period’ – usually within 10 - 15 days of purchase (depending on policy), the insurer can cancel the policy and refund your premium.

Note: not available in all states, so check your policy.

However, if you decide to cancel your policy AFTER the Free-Look Period has expired, insurers will either issue you a voucher for the premium paid (AIG does this) or the insurer can permit you to use the policy for a future trip good trips between 12 months and 24 months (depending on policy).

For AIG vouchers - you must request a voucher before your original departure date. They cannot give a voucher after the departure date named on the policy. They do not make any exceptions.

The voucher is valid for 24 months from the date of issue and cannot be extended. If your new premium exceeds than the value of the voucher, you are responsible for any additional premium. If the new premium is less than the voucher value, AIG cannot refund the difference or provide a future voucher.

Other Insurers. Other insurers don’t issue vouchers but permit the policy to be moved to another trip. If you do not yet have a new trip planned, the insurer can modify your travel dates up to 12 - 24 months (depending on policy) from your original policy purchase date, which essentially holds the policy until you book your new trip.

Can I Save Money Buying Directly from the Insurance Company?

The short answer is No!

When you buy a policy directly from an insurance provider, it does not save you money. Travel insurance policies must be the same price regardless of whether you buy them directly or through a marketplace like AARDY.

Also, shopping with a single carrier does not provide you with quotes from other travel insurers. When you compare travel insurance plans from different companies at the same time, you are working smarter, not harder.

After all, you will not find the same trip insurance at a better price, even directly from the insurance company. AARDY guarantees you the lowest prices allowed by law for the same policies you will find on an insurer’s website.

Have questions? Send an email, chat online with us, or call AARDY at 650-492-6298 to receive a free quote.

Safe travels!