“Insurers have constantly looked at ways to support their customers for the day the travel bubble becomes a possibility, introducing tailored policies that provide cover for a range of Covid-19 related claims,” Tim Grafton, ICNZ Chief Executive, said.
Grafton explained that many travel insurers were now offering cover for specific Covid-19 claims, including cancellation costs should an insured contract Covid-19 and be unable to travel, costs to return home if a relative gets sick with Covid-19, or costs should a traveller get Covid-19 and need to quarantine while overseas. In addition, some insurers are also covering reasonable alternative accommodation costs should the person that an insured travels with gets Covid-19.
Grafton warned that insurers are, unfortunately, not able to cover against border closure risks. It is simply not possible to develop a product that accounts for the uncertainty and the level of risk this presents, says Grafton, who added: “Insurers and customers need certainty of the exact dates and times borders open or close so that they know when cover is available and when it is not.”
Travellers should opt for comprehensive cover
ICNZ urged travellers to be aware of what is and isn’t covered by their travel insurance policies. “Travel insurance is still available to purchase and offers cover for a variety of unforeseen events as outlined in individual policies — such as a broken leg, theft or lost baggage or the impacts of a significant weather event,” said Grafton.
However, Grafton says that there are number of things that aren’t currently covered by travel insurance policies, including the aforementioned risks related to border closures, as well as cancellations to travel caused by government-imposed lockdowns and costs if the government imposes a blanket quarantine.
US travel insurance market responds to new travel requirements
It’s not just the New Zealand travel insurance market that’s innovating in response to Covid. In the US, AIG Travel has just announced its Lodging Expense Bundle (which covers the cost of accommodation for travellers that test positive for Covid and are unable to return home) in response to the Centers for Disease Control & Prevention’s (CDC) recent inbound travel requirement.