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Travelling in the age of a pandemic

June 4th, 2020  |  Travel

As COVID-19 restrictions loosen across the country, travelling for some will become more than a trip to the grocery store.

But what does that mean for travel insurance? It’s a safe bet that the industry has changed for good.

Forbes Magazine said recently there are three ways the virus has altered travel insurance:

  1. Some travel insurance companies have stopped selling policies. Most have happened for international markets. Several U.K.-based travel insurance companies, for example, have stopped selling policies.
  2. New policies come with more limitation. Coverage has been tightened to exclude future pandemics like the coronavirus.
  3. ‘Cancel for any reason’ insurance is getting new restrictions or disappearing. These policies, which are more expensive, allow you to cancel a trip for any reason and receive a partial refund. They are now becoming less generous.

In Canada, the federal government issued an advisory March 13 against all non-essential international travel to help stop the spread of the virus. While the advisory remains in effect, Canadians can still travel abroad.

Travellers, however, may have a hard time finding flights and their insurance likely won’t cover their medical bills if they fall ill with COVID-19. If they do, they can’t fly back into the country until they’ve recovered.

The Canada-U.S. border, meanwhile, remains closed to tourists crossing by land until June 21. And that date could be extended if the number of COVID-19 cases in the U.S. — now totalling more than 1.6 million — continues to be a concern.

At least five Canadian insurance providers — including major players Manulife and Allianz —issued company memos earlier in the crisis stating they would factor in the government's travel advisory when customers make claims.

Manulife, Allianz, TuGo and Blue Cross stopped selling the coverage to new customers, because they consider the virus a "known" issue.

Financial concern

In an interview with CBC News, insurance broker Martin Firestone said when Canada does lift its advisory, insurers may continue to exclude coverage for COVID-19 related illnesses until there’s a vaccine. Not only is there the threat of the virus, there’s a very real financial concern when travelling without medical coverage.

"A person who ends up on a ventilator in the U.S., it could be hundreds of thousands of dollars, so (insurance providers) are in no position to take that risk," Firestone, president of Travel Secure in Toronto, told CBC.

He believes if these exclusions continue, many Canadians will simply refuse to travel – including Snowbirds.

“I’m worried that the entire snowbird season, upcoming, could be put on ice … until such a time that there is a cure or a vaccine.”

While CBC reached out to several major insurance travel providers to find out if they would resume covering COVID-19 related issues when Canada lifts its advisory, they said they couldn’t make a definitive statement at the time.

COVID-19 or not, one thing hasn’t changed when it comes to buying travel insurance.

Always read the fine print. Examine the exclusions and determine what might not be covered before you go. Be sure to talk to your insurance broker if you have any questions.

RELATED READING:Insurers stop covering virus trip cancellations

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