Recently there have been many questions asked about available travel insurance policies and how they are reacting to the novel Coronavirus also known as the COVID-19. The actual questions about the virus are very similar to the questions that were raised in the past relating to SARS and Avian Flu. They basically fall into three categories:
There is one exception to the two questions, the one about cancelling for fear of being exposed to the virus or the Government action – “Cancel for any Reason”(CFAR) coverage that can reimburse cancelled trips up to 75%. Some companies offer CFAR as an additional coverage that can be added which allows a traveler to cancel for any reason not covered by the basic policy but there are conditions that apply concerning when the policy has to be purchased and whether a traveler has to insure to value.
Will travel insurance companies expand their coverage to include “risk of exposure” or Government action causing cancellation? I don’t know. Insurance companies have a very delicate balancing act in evaluating risk, widespread need, exposure to a single event that can cause catastrophic losses, and arriving at an appropriate premium. But I would look for change to soon. One thing I hope they will consider is changing their "free look" provision to include better clarification on whether or not they will provide a refund or credit if something like this happens again.