If the new coronavirus interferes with your already-planned trip, don't count on your travel insurance to provide much help.
Unless you have "cancel for any reason" coverage, you might be out of luck.Â
While some insurers have loosened their restrictions, fear of contracting the new coronavirus, or COVID-19, is not covered under a standard policy, experts say. And because the spread of the pathogen is now considered a known factor for travel — i.e., it's a declared pandemic — it is likely to be excluded from coverage.Â
"It's going to differ depending on the policy, which people are finding out," said Jill Gonzalez, an analyst with personal finance website WalletHub. "It depends on the fine print."
The rapid spread of COVID-19 has hit the travel industry especially hard, as event cancellations, closures, travel restrictions and consumers' fear have stopped many trip-takers in their tracks. Already, the International Air Transport Association estimates that airlines globally will see a revenue loss of more than $100 billion this year.
As of Friday, there were at least 1,250 confirmed cases of COVID-19 in the U.S., although the count is expected to rise. Globally, there have been more than 137,000 cases, with Europe now considered the epicenter of the outbreak. As state and local officials rush to mitigate the spread of the virus — i.e., closing schools and banning large public gatherings — and President Donald Trump declares a national emergency, consumers are being forced to reconsider their travel plans, whether domestic or international.
Some travel insurers, including TravelGuard Group and Allianz Global Assistance, have posted notices on their websites about how their policies will or won't cover cancellations due to the coronavirus. Allianz, for one, has loosened some restrictions on cancellations due to illness from COVID-19.
Typically, a standard policy with "cancellation and interruption" coverage includes illness by you or a family member before or during the trip. Right now, though, many insurers will only cover the coronavirus if the policy was purchased before Jan. 21, according to the US Travel Insurance Association.
"There's a clause in many policies that says you won't get trip cancellation coverage for an illness once it's declared an epidemic or pandemic," said Mark Friedlander, spokesman for the Insurance Information Institute.
However, if you cannot go on your trip because you're quarantined — and can provide documentation of it — you might have coverage, depending on the policy, Gonzalez said.
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Generally speaking, the best way to protect your trip through travel insurance is to purchase "cancel for any reason" coverage if it's available in your state and if it hasn't been too long since you made your reservations.
"You have to get that within 14 to 21 days of booking the trip, so unless you booked fairly recently, this probably won't be an option," Gonzalez said.
Friedlander said that in January, sales of that coverage jumped more than 100% from a year ago.
"That was before we knew how impactful [COVID-19] would be in the U.S.," he said. "People were buying it because they saw what was happening globally."
If the benefit is available, be aware that it comes with restrictions and rules, adds to the cost of your policy — and typically won't fully reimburse you.
The price for a standard policy is usually 7% to 10% of the cost of the trip, Gonzalez said. Adding cancel-for-any-reason coverage adds about 40% to that. So if standard option for a $5,000 trip costs $500 (10%), the extra coverage would add $200 to that (40% of $500).
However, Gonzalez said she wouldn't be surprised if the price rises.
"A lot of these insurance companies say their rates can change without notice for any reason," she said. "I can see those prices fluctuating because of what's going on."
If you do use the cancel-for-any-reason coverage, you can expect to only get some of what you paid for your trip.
"You might get 75% of it back," Friedlander said.
Remember, too, that you may be entitled to some sort of compensation by the airline, cruise ship or other provider that you booked through if you're left in the lurch.
"If a trip was canceled by the carrier, you should get a credit or refund from them," Friedlander said. "You don't need travel insurance to get that."