Understanding and drawing on the cancellation, refund or insurancecovers of all operators in the travel value chain offers victims of COVID-19cancellations the best option to spread their risk, increasing the chances andvalue of settlement.
Now that COVID-19 has been declared a globalpandemic it is simply not possible to travel internationally. If travellershave a flight booked, “you don’t have a choice, you have to cancel,” saysChristelle Colman, Insurance Expert at Old Mutual.
The good news is that if you have purchasedtravel cover you can claim.
The bad news is that, “the amount that you canclaim is not likely to cover your full loss,” says Colman. There is also arange of technical hurdles that may make submitting a successful claim a challenge.
The best option is to, “understand the detail ofyour own travel cover while developing a thorough and complete picture of thecovers, refunds and cancellation policies of all the other operators involvedin your trip,” says Colman.
Red flags and opportunities to watch out for:
Cancellation for fear of sickness or pandemic is most likely notcovered
Travel policy holders can only call on their travel insurance, “ifoperators themselves cancel bookings, public transport is officially shut downor countries go to into official lock down,” says Colman.
Disinclination to travel, even for the reason of a pandemic, isunfortunately excluded by most polices.
While specific ‘cancellation for any reason’ benefit can bepurchased this is generally only available on more expensive polices and onspecific request.
Travel insurance generally only covers 50% ofthe cancellation costs incurred
Policy holders should do their utmost to, first,recover as much as they can from airlines, accommodation establishments, touroperators or any other service providers in the travel value chain. “Most ofthese have their own cancellation policies and may well cover larger portionsof your loss than the 50% that your travel policy covers,” advises Colman.
While every operator has their own cancellationpolicies and many are structured to avoid having to pay out, “it often makessense to pay a little extra for tickets or accommodation and tour options thatinclude an element of cancellation cover,” advises Colman.
Since the majority of travel insurance policiesonly cover 50% of loss, only fall back on your travel cover as a last resort.
Travel insurance only covers sudden and unforeseenevents
It is important to understand that travelinsurance policies don’t cover loss incurred as a result of a known event orcirc*mstance. “If the COVID-19 epidemic was generally known about – even ifonly then in China – at the time that you purchased your ticket, you may not becompensated,” says Colman.
Short term insurance is based on the premisethat claims must be for fortuitous events only. “Taking out a travel policyafter the pandemic had become known will not give you the cover you may beseeking,” says Colman
Successfully lodging cancellation or curtailmentclaims requires proof
Travelers lodging claims should be aware thatthey will be required to:
- Prove all payments made for travel costs.
- Provide confirmation from travel agents, airlines, hotels and tour operators that none of these provide their own refunds or cover.
- Prove the value of cancellation fees or penalties if applicable.
- Provide medical reports or a death certificate (or both) justifying the cancellation.
- Provide proof of any other additional travel costs incurred in the event of curtailment.
Similarly, claiming for illness while travelling requires:
- A record of diagnosis and detailed medical report from the presiding medical practitioner abroad.
- Contact details of the Medical Practitioner.
- A medical report from the South African medical practitioner who managed the patient once home.
- All invoices and receipts of expenses incurred.
In short, keep a meticulous record of allbooking, cancellation policies, treatments and other expenditure when planningas well as during a trip, especially if you fall ill.
“The more proof and information you have thebetter when it comes to claims,” says Colman.
Postpone rather than cancel travel
Most airlines, accommodation establishments andtour operators allow clients to postpone their travel until after the COVID-19pandemic has subsided,” says Colman. While terms differ between operators,postponing or receiving a credit note to use at a later date – even if thereare penalties or rebooking costs – “might be a better way to limit losscompared with outright cancellation,” advises Colman.
Travel insurance only applies to travel and riskoutside South Africa
If you contract COVID-19 while travellingabroad, you cannot rely on your travel policy to cover tests and treatment onyour return to South Africa,” says Colman. Once home, South Africans will needto rely on their medical aids or their own pocket for treatment of COVID-19.
Additional travel insurance purchased under thespecifically requested extension covering ‘cancelation for any reason’ needs tobe purchased within 48 hours of buying a ticket
As many travellers are discovering, purchasingan extension on their travel cover – covering cancellation for any reason –only applies if this cover is purchased within 48 hours of ticket purchase.While this condition appears in the small print on the policy and on mostinsurers web sites, “this is often not fully explained or understood whenpeople purchase this extension,” warns Colman.
In pandemic conditions travel insurance may notcover overseas medical treatment
Travel policies generally cover both medicalexpenses as well as any other costs associated with treatment abroad.
In the instance of pandemics, however, mosttravel policies only apply for, “the first five days after the pandemic isofficially declared – provided your ticket was purchased before the declarationof pandemic,” warns Colman.
Travel insurance will not cover extendedaccommodation costs as a result of COVID-19
Travellers stranded in a foreign county inCOVID-19 lock down will need to find accommodation for the period of the lockdown. In many cases this could be for months at a time. “Emergencyaccommodation and sustenance costs are not covered by most travel policies,”cautions Colman.The best that people who made arrangements totravel over the next few months can do is to research the entire value chainthat they have engaged, “first drawing on the specific cancellation orpostponement polices of each of the operators in this chain,” advises Colman.These may well pay out more than 50% of the loss, or at least allowpostponements or provide credits for future use at limited cost. Only when allthese options are fully exhausted should the remaining loss be presented – withall supporting documentation – to the travel insurer.
