Coronavirus: Insurance nightmare for Kiwi travellers

A Kiwi traveller who has had to shell out $1500 for coronavirus-related flight changes says her insurance policy "isn't worth the paper it's printed on".

Stratford resident Donna Drummond purchased insurance from Travel Insurance New Zealand (TINZ) in October for a trip to Europe and the Middle East in April and May. 

Her original schedule would have seen her travel to Italy, Spain and France before heading to Egypt and Jordan. She would have then flown back to Italy before returning to New Zealand. 

But the global outbreak of Covid-19 means there are now travel bans in place between northern Italy and a number of other countries, including Spain and Jordan.

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When Drummond contacted TINZ to see if she would be covered for the affected flights, she was told she wouldn't be paid.

"They told me there was no way they would pay me because it was related to coronavirus. They said, 'You can try, but you aren't going to get it'," she said.

"It's all a bit of a nightmare. I can understand them not paying people after they were notified of the coronavirus. But the coronavirus didn't even exist when I took out this policy."

Drummond said she is still going to go on her trip, cover or no cover.

"But I just want to make people are aware that their insurance isn't worth the paper it's written on." 

Napier resident Ian MacDonald was planning to spend most of April in southern Italy with his family. But he said he's now waiting to see what happens.

He took out travel insurance for the trip with AA insurance, via Allianz, in June 2019.

"If we cancel the trip it's voluntary so we won't get our money back. But if we go we won't be covered for anything relating to coronavirus," he said.  

MacDonald will have to make a decision on whether he will or won't take his family to Italy in the next two weeks. 

"At the moment the Government is saying if you come back from northern Italy you have to self-isolate for 14 days. But if that self-isolation ends up covering all of Italy we will have to take two weeks off work," MacDonald said.

"You buy insurance to cover you for these sorts of risks."

MacDonald said he was hoping the insurance would cover him for anything he couldn't recover from the airlines and accommodation providers. 

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

The Travel Insurance New Zealand (TINZ) website says all of its policies contain exclusions that relate to epidemics or pandemics.

"Therefore, regardless of when you purchased your policy, it is unlikely that any claim (to anywhere in the world) will be covered if it relates to the coronavirus."

The ​Allianz Partners website contains a similar statement, saying travellers should refer to their policy to learn whether exclusions would apply to them. However, Allianz said it isn't applying the same "general exclusions for medical and emergency medical transportation claims related to Covid-19".

Insurance Council chief executive Tim Grafton said it was important for people to take out travel insurance, even if they aren't covered for issues relating to 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."