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Buying Travel Insurance During Covid-19: Should You? What Kind? | Frommer's Andy Dean Photography/ Shutterstock

Buying Travel Insurance During Covid-19: Should You? What Kind?

If you never bought travel insurance before, you should now. When you vacation in the age of coronavirus, here's what to look for in a policy—and what it won't cover.

Last updated December 10, 2021

We don't have to tell you how uncertain everything is right now. But, when travelers want to assuage anxieties about the future, they can take one smart step: they can buy insurance.

Will that solve every issue? Of couse not. But insurance does have real value at this unusual moment.

In typical years, a garden-variety travel insurance policy would cover you for most calamities that could happen on a trip—a broken leg, lost luggage, or a vendor going bust. And those unfortunate events are usually still covered. The one thing that wasn't covered, at least at the start of the pandemic, was Covid-19.

But we're happy to inform you that the majority of policy carriers now treat that disease like the ones that have been covered for decades. So travelers are now more likely be covered for it—but always check the fine print on every policy.

Here are some other issues to look out for:

The rise of CFAR 

In Ye Olde Times of travel insurance (i.e., 2019), springing for a "Cancel for Any Reason" (CFAR) clause was something few of us did, mostly because it's one of the most expensive add-ons to a policy. Most travel insurance costs 4%–10% of the overall price of a trip, and CFAR adds 50% to the price of a basic policy.

But the extra cost is worth it in times like these: CFAR lets you cancel travel and request a refund no matter your excuse—even if you're simply not in the mood to go anymore.

Fear of travel is not something an insurer will otherwise let you cancel a trip over. And "fear of travel" is considered the issue even if the destination you're visiting is seeing a Covid spike—a smart reason to change plans, but one that isn't covered by standard travel policies. With CFAR, a health concern qualifies as a legitimate excuse. 

The head of one policy comparison site, Aardy, told consumer reporter Christopher Elliott that before the pandemic, only 5% of customers purchased CFAR at the time they bought their policies. Now, half of customers do.

Why? Because CFAR coverage supplies the level of protection that most of us want the most right now. It allows you to back out of vacation plans and still get money back.

That said, CFAR policies don't let you get 100% of your money back. Most set a minimum reimbursement at around 75% of your costs, but according to Stan Sandberg of the insurance marketplace site, some policies moved that bar down to just 50% reimbursements during the course of the pandemic.

That being said, even partial CFAR beats a cancellation that isn't protected at all.

More bad news: People who live in New York State are not allowed to buy CFAR insurance because of local insurance laws. Washington state also has limitations on CFAR coverage, though some policies are allowed.

Covering your health

The other big thing we're looking for in a travel insurance policy is health care

If you're traveling domestically, your existing health insurance probably covers you. (Check to make sure.) But if you don't have health insurance at home, or if you need it to be better, you can always augment your coverage with travel insurance.

If you're traveling internationally,  health coverage is more crucial than it has ever been. The usual accidents and illnesses can still happen, but now there's also Covid care to factor in. Thankfully, most policies now cover Covid, as they would any other illness. These are nationalistic times, and to be safe, you want to know you'll be able to access the health care system in a country that isn't yours. Proof of an ability to pay can open those doors.

You want a policy that ensures you'll have coverage in the best hospitals wherever you are and that will also pay to send you home. Air medical transport can be guaranteed through companies like Medjet, but don't make the mistake of thinking that evacuation insurance will always allow you to come home for treatment if you've tested positive for Covid, a common error according to Sandberg. The policy in the United States is: travelers must show a negative test result to enter the country and that goes for citizens as well as non-citizens. Evacuation insurance might be able to get you to a better hospital within the country you're visiting, but it won't allow you to cross borders with coronavirus.

The only exception is if you have a policy that specifically covers air ambulances. If you have this type of policy (and MedJet, among others, does offer this) it will cover the cost of a private jet, with a trained medical staff aboard, who will in effect create a bubble of medical care around you, and take you from a foreign hospital to the hospital of your choice in your home country. This type of coverage only works if you need hospitalization. You could not use an air ambulence to try and skirt the international quarantine rules.

Watch out for capped maximum payouts, too. Covid-19 can linger in your system, causing havoc for weeks and even months, so you want to make sure your coverage would provide enough funds for an extended medical stay, should that be necessary. Thankfully, the cap for that type of assistance has risen over the course of the pandemic from an average of $1000 to $3000 to $4000.

A few other questions that have arisen during the Covid-19 pandemic:

If the U.S. State Department advises against travel somewhere, can I cancel and get reimbursement?

Not generally for that reason alone. But try to get a refund from the travel operator that sold you the vacation. If that fails, you might then be able to get your travel insurer involved.

If my airline cancels my flight, can I get reimbursed?

Yes. If you cancel, you only are entitled to a credit or voucher, but if the airline cancels or changes your flight schedule to something too difficult to manage, you are legally entitled to a refund from the airline. Go to airlines before going to your insurer.

I had insurance for a trip I didn't take. Can I apply my coverage to the postponed trip?

Usually. The insurer will re-price the trip based on the new dates, though, so you may have to pay a little more after the premium is adjusted. You won't get a refund.

Will travel insurance cover my expenses if I am quarantined on vacation?

Trip interruption coverage will usually cover expenses, though the amount of expenses is usually capped (see above).

My cruise changed its itinerary and now I don't want to go. Am I covered?

Not with a standard policy. Cruise lines are permitted to change ports as part of the purchase contract made with passengers, and travel insurers won't reimburse you for itinerary changes unless you purchased a CFAR policy or a premium-level product that explicitly allows for reimbursement in that case.

What if I test positive while I'm out of the United States?  If I am temporarily denied re-entry, h
ow can I meet expenses?

Trip interruption coverage will likely help you cover some, if not all, expenses. Not to sound like a broken record, but check for this in the fine print before purchasing a policy.

Read more Frommer's advice about travel insurance:

How to Tell If You Need Travel Insurance, Based on the Type of Vacation

Travel Insurance at a Glance