Over the past several months the travel industry has changed dramatically. All forms of travel have been affected, with cruises and international air travel being among the hardest hit. And travel insurance is no exception. In no small terms, it’s been a harsh blow, but one we feel we will all recover from. Here’s some of the changes that have taken place.

What happened to Cancel For Any Reason(CFAR)?
There were some immediate changes. The retraction of Cancel for Any Reason(CFAR) coverage availability was the most important. Several companies withdrew their CFAR coverage options and one company limited their option to only 50% reimbursement. It remains to be seen whether or not the companies that removed CFAR from their policies will return. 

Epidemics and Pandemics are excluded from many policies.
Many policies exclude epidemics or pandemics from coverage. This exclusion has been in many policies for the past several years. The exclusion gets to the core of insurance pricing and underwriting theory - to avoid single event catastrophic losses that can’t be predicted and can’t be priced. If you’re concerned about COVID-19, be sure to carefully look at the policy exclusions to be sure if you’ll be covered whether they will cover you. 

Changes we probably won’t see.

• Coverage for cancellations where the travel supplier cancelled the trip due to travel warnings or concern of exposure to disease or lack of participation . This probably won’t be added since most travel suppliers will provide a full refund if they cancel the trip. However, some tour companies are changing their “cancellation provisions” to provide a refund in the form of a voucher for future travel with them. The best way to avoid this risk is to deal only with travel companies that offer a complete refund if they cancel the trip.

• Changes to the “free look” provisions (aka premium refund and policy cancellation provision). I could write a complete article about “free look” provisions and the theory of earned and unearned premium but that’s for another day. The best way to minimize your risk is to buy your policy early and only insure for the amount of money at risk at the time you buy the policy. Coverage can always be added later, when payment is actually made or when you add additional arrangements as long as you do so quickly. Many policies require additional coverage be added within a specific period of time in order to have continuity of pre-existing coverage .

QuoteWright is here to help you through the maze of travel insurance