The global coronavirus pandemic of COVID-19 has upended some of the conventional wisdom and practices involved in travel insurance. This is what economists call a “black swan” event, being unpredicted and having unpredictable consequences.
Before this, the primary questions have been the following: destination; duration of trip; purpose of trip; and activities likely to take place. Most travel policies cover these items in detail which requires serious attention. What can be reasonably assumed sufficient for a two-day business trip to Berlin is very different to what might be needed for a two-week holiday involving adventure travel activities in a different part of the world.
Thus far, for most of Europe, holding an EHIC (European Health Insurance Card) has been enough to cover accidental and pre-existing medical issues for reduced cost or even free treatment, even in non-EU countries like Switzerland and Norway. For travel elsewhere, specialised travel insurance policies are available which are recommended for countries where expenses can be very high, like the USA. Please note that EHIC is only valid until the end of this year. What happens thereafter has yet to be decided by agreements still to be negotiated after Brexit.
What the COVID-19 pandemic has highlighted are the incidental costs involved in a widespread health crisis.
Beyond the medical expenses involved for treatment, there are issues with extended stays, detention under quarantine and cancelled travel bookings, not to mention loss of income from being unable to return to work on schedule.
This is where shopping around for affordable and seemingly adequate insurance cover can result in disaster. What is essential now – and, arguably, in any circumstances – is expert advice from your insurance consultant to ensure that a black swan event does not cause lasting harm.
The precise details of every policy available are too lengthy to discuss here and only a professional can help guide you through them. Some examples of surprising restrictions that might apply highlight this need. For example, if you travel in a group but one or more people joining them are not included in the policy, the entire group policy could be invalidated. Or if you are going on a cruise, standard policies will not cover you because of additional transport costs if you have an emergency at sea.
Also, as the present pandemic shows, your policy could offer no support if you are put into quarantine by government action or you visit a location that the Foreign and Commonwealth Office has declared to be a risk. In such cases, the question of force majeure comes into play. Even though it is a medical issue, an epidemic could result in your cover being limited or invalidated.
The costs of additional cover against worst-case scenarios vary enormously but there are two key points that need to be kept in mind. Given whatever risk you might be exposed to, can you afford the chance of having no cover at all? And can you afford the risk of being in what could be a life-threatening situation?
Speak to your consultant before you travel.