Coronavirus: Most travel insurers not offering Kiwis cover for virus-related claims

Planning a trip later this year? Chances are you won't be covered for any issues relating to coronavirus – even if you've paid for insurance.

A number of New Zealand-based travel insurers, such as Southern Cross, Tower and 1Cover, are not offering cover to travellers for anything related to coronavirus. 

There have been more than 89,000 cases of the virus worldwide, including one confirmed case in New Zealand. 

With cases in most corners of the globe, and extended travel restrictions affecting China, Iran, South Korea and northern Italy, we look at what insurance companies are doing. 

Southern Cross Travel Insurance customers who bought their policy before 2pm on Friday, January 31 appear to be covered. 

However, if you purchased a policy after that date there is no cover for anything relating to coronavirus as it is no longer an "unexpected event", the insurer said on its website.  

Similarly, Tower Insurance customers who bought a policy after 5pm on January 24 are not covered for any claims related to coronavirus "under any circumstances", Tower's website said.

Those who bought a policy before 5pm on January 24 are still not eligible for cover – however, if you are specifically travelling to or are in China's Hubei province, Tower "may be able to consider your individual circumstances". 

Under 1Cover Travel Insurance, any claims related to coronavirus are exempt under its pandemic or epidemic exclusions, the company's automatic phone recording said.

However, customers are still entitled to lodge claims for review, which will be assessed on a case-by-case basis, it said.

Meanwhile, State and AMI – part of IAG Insurance group – are still covering claims for medical events related to coronavirus.

The only exception to this is for those in or travelling to mainland China on policies booked after February 3, Cover-More New Zealand – which provides insurance to AMI and State – general manager of sales and distribution Will Ashcroft said. 

This was in line with when the Ministry of Foreign Affairs and Trade changed its advisory on travelling to China, he said. 

All other State and AMI customers will be covered in the event of hospitalisations and medical evacuations or repatriations due to the virus, Ashcroft said. 

Given medical costs in a foreign country can run into tens or even hundreds of thousands of dollars, it is "critical" their customers are covered, he said. 

He is not aware of any insurer currently offering cover for issues involving flights affected by the coronavirus, as the risk is "colossal" and would likely push premiums up. 

STILL INVEST IN INSURANCE, EXPERTS SAY

Travel insurance expert and director of Compare Travel Insurance, Natalie Ball said it may be "too late" to buy cover for the coronavirus, but you should invest in travel insurance. 

The majority of New Zealand travel insurers have exclusions that relate to epidemics, pandemics and the likely threat of an infectious disease, Ball said. 

"Regardless of this exclusion, there is unlikely to be cover for cancellation claims that relate to events known in the mass media, or anything that you were aware of that may give rise to a claim at the time of purchase."

Ball said those who had purchased cover well ahead of coronavirus becoming a "known event" may be eligible to claim losses, particularly when affected by travel bans. 

Although policies vary, people may be entitled for reimbursement should MFAT issue a level-four travel alert – or a 'do not travel' warning – affecting your travels. 

While it may be too late to purchase cover specifically related to the coronavirus, "in an unpredictable world, it's always smart to purchase travel insurance as soon as you have outlaid for some expenses". 

Insurance Council chief executive Tim Grafton agreed – stressing the importance of travel insurance regardless of the level of cover around coronavirus.

Given the "evolving situation", Grafton urged people to stay up-to-date with what was happening, check with their insurer for changes and to keep an eye on SafeTravel, the Government's official advisory site.

"We strongly advise anyone who is concerned about their insurance cover or looking to amend their travel in response to the outbreak, to contact their travel agent or airline in their first instance or speak with their insurer before they make any changes."