A quick trip to the world of travel insurance transformed by Covid

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Planning to travel here or abroad? The pandemic has changed a lot of things, including insurance policies. Morry Bailes take a look at the fine print.

Airlines are turning on again, routes are planned, travel bags dusted and vaccine passports in order, as Australia reopens its doors to the world.

We are a travel mad nation and while there are risks many of us will take to see friends, family and our favorite places.

But have we properly assessed the risk? Most of us focus entirely on the likelihood that we are susceptible to contracting COVID. As we sat in a departure lounge holding our glass of pre-flight bubbles and mentally browsing our list of must-haves – passport, vax certificate, rapid antigen tests, COVID safe masks – some of them. we may have overlooked one of the fundamentals that can not only ruin vacations but devastate our finances; adequate travel insurance.

I have my AMEX Black travel insurance policy, you think. Or my company’s corporate travel insurance.

In our enthusiasm for getting back into the air or on the road, many travelers haven’t considered the altered reality of travel insurance, even if you have a current and valid policy. What you once had in travel insurance may not be anymore, especially when it comes to COVID.

The insurance industry was quick to pivot when the scale of COVID became known, to stem devastating losses, so a good understanding of what your policy is providing – and most importantly is not providing – is critical reading even before. to look at a flight schedule. So hold the bubbles and read on so we can have a good look at it.

Photo: AAP / Bianca De Marchi

The first and most fundamental legal thing to understand about insurance contracts is that they are just that, a contract. You are one party and the insurance company is the other. There is federal and state law that basically states that insurance companies must play fair, but there is no beast like a standard insurance policy.

Any insurance contract, although it may have similarities to another, is completely independent, with its own provisions containing its terms and conditions. Unless some aspect of the insurance contract violates the legislative framework that underpins the insurance industry in Australia, it is binding when you enter into the contract, and as the High Court recently stated very clearly, a contract is a contract. Your rights and rights will be determined by reference to this agreement, and this agreement only. Insurance contracts insuring you against the risks of travel are no different in this regard, whether linked to a credit card or purchased as a one-time insurance product. It is therefore essential to read carefully and seek advice when in doubt.

Here are some practical tips for reading an insurance policy. First you need to understand who is covered. Relying on an insurance policy attached to your credit card may assume that other family members traveling with you are similarly covered. They may not be.

Second, understand the extent of your coverage. It can be broken down into basically two things; what events or things are insured, and for what amount are these events or things insured. There is no point in getting COVID in the United States, which was covered by your policy, only to find that if you need hospitalization, the amount of coverage is insufficient.

Third, and this is really part of the process to fully understand the extent of your coverage, you have to understand what is excluded. And that’s the kick. Many travel policies have totally or partially ruled out COVID, or have changed what you might expect from “regular” travel insurance coverage with respect to COVID.

Never the Latin legal maxim Warning, which the buyer is wary of, has been more relevant.

A few real-life examples of how insurance policies read now help to underscore this point. Many corporate policies covered directors or executive officers not only for business travel but also for personal travel. In a major change in insurers, this is often no longer the case. Business travel can still be covered, but it’s dangerous to assume that any element of personal travel will be, even if your trip starts with business and turns into leisure.

A well-known insurer in the Australian market now provides for an exclusion in its business travel policy as follows:

“We will not pay any compensation for any loss, damage, liability, event, bodily injury or illness resulting directly or indirectly from, related to or in any way related to coronavirus disease 19 (COVID-19) (or to any mutation or variation thereof or of any related strain) and / or its epidemic when the covered person was on a private trip of directors and executives.

So, the purpose of the trip became very important. Personal travel is excluded here – and possibly in many travel insurance policies across Australia. You can assume, based on past experience, that you have travel insurance which, on closer inspection, does not exist.

It’s also possible that while a travel policy will work normally for all other risks, there is a more general exclusion for COVID. An insurer thus excludes its liability:

“No coverage is provided for a claim in any way caused by or resulting from: a. coronavirus disease (COVID-19); or b. severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2); or c. any mutation or variation of SARS-CoV-2; or d. any fear or threat of a), b) or c) above.

In addition, many insurers exclude what is referred to in the industry as “cancellation or interruption” coverage of policies. Cancellation and interruption obviously have nothing to do with the disease; it is when related events occur, such as border closures that are indirectly caused by COVID but not covered by the insurance policy. This is a classic cover stitch scope.

In a real-life example I learned recently, a couple from New South Wales planned and booked their wedding for the Byron Shire in northern New South Wales for a Saturday in November. Due to the COVID outbreak in New South Wales, the wedding was moved to Corrumbin Valley in South Queensland as it was the easiest destination for interstate guests due to Important lockdown and quarantine rules for interstate guests visiting NSW. Sadly, Queensland then implemented a strict border closure with New South Wales, meaning the hapless couple were unable to attend their own wedding. So a decision was made to relocate the nuptials to New South Wales, which now relaxed restrictions. While this is now fine for the bride, groom, and some of the guests, what about the losses suffered from canceled flights and accommodation for Queensland, which has no travel restrictions with most States ?

Photo: AAP / Jason O’Brien

The answer unfortunately for a family in South Australia is that their insurer rules out cancellation and disruption for a “planned circumstance” and considers that from Australia’s declaration on the COVID pandemic in March of l COVID is and remains a “predicted circumstance” last year. In short, there is no cover for these losses at all. All this when they have had the foresight to take out travel insurance, but with enough coverage to be of no use to them. In addition, it is largely the norm now in many travel insurance policies in Australia.

Never the Latin legal maxim Warning, which the buyer is wary of, been more relevant.

But wait – what if an airline or tour operator or tour operator says we’ve covered it, travel insurance is included? It’s no surprise in a world where travel, COVID, and insurance don’t always come together in the same sentence in a consumer-friendly way, that travel agencies are making side deals with insurers to keep the doors open. and retain customers. .

Such supplemental insurances are certainly worth considering, but you need to consider it. This can prove to be very useful as an insurance “filler” when other insurance coverage is not available and could take over responsibilities specific to that service. As with other retail travel insurance, it is essential to understand the scope and limitations of the product. In addition, some tour operators may operate in other countries and have their insurance policies and disputes handled outside Australia. Different rules and regulations and a different jurisdiction can make it difficult to file a claim. So, don’t get carried away by these seemingly useful offers and fret about the details.

This article should not be read as a discouragement to travel but rather to do so without neglecting one of the most important ways to eliminate risk, good travel insurance. In other words, to travel, knowing that some, but not all, of the losses COVID suffers can be insured. Of course, it is essential in the first place to make sure that COVID is not completely ruled out. After that, it’s a safe starting point for assuming that today’s travel insurance policies will likely cover you for medical bills if you actually get sick with COVID but not necessarily all of the other related losses, including in a policy, ‘repatriation of the remains’ or ‘funeral expenses’ if the circumstances take the worst for you.

So, when planning your next travel getaway, check not only the reimbursement and credit policies of airlines and other accommodation providers and the travel industry, but also your travel insurance policy. And when in doubt, seek advice from an insurance broker or lawyer.

Greetings, have a safe trip and have a good trip, despite COVID.

Morry Bailes is Senior Counsel and Business Advisor to Tindall Gask Bentley Lawyers, Former Chairman of the Law Council of Australia and Former Chairman of the Law Society of South Australia.

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