Travel insurance & coronavirus: Are you covered?

Australian travellers may want to check their travel insurance, given it’s possible their policy might not provide cover for any claims, losses or costs associated with the deadly coronavirus (COVID-19) outbreak.
Coronavirus travel insurance
Source: Fahroni (Shutterstock)

The mysterious coronavirus that causes pneumonia-like illness sent the Chinese city of Wuhan – considered the epicentre of the virus – into lockdown in mid-January, and has now spread to multiple countries, including Australia.

The World Health Organization (WHO) has declared the novel coronavirus outbreak an international public health emergency, while the Australian Government has issued a “do not travel” warning for China and Iran, and is restricting inbound tourists who have recently been in China, Iran and South Korea from travelling to Australia. There is also a “do not travel” warning for Daegu, South Korea. People travelling to Australian from Italy will face increased checks when they arrive here, Prime Minister Scott Morrison announced today.

According to Smartraveller, the travel warning may mean travel insurance policies could be void and the federal government “may be unable to help” if you travel to the identified locations and get into trouble.

Some Australians who were already in Hubei Province, as well as passengers on the Diamond Princess cruise ship where a breakout occurred, were evacuated to quarantine facilities on Christmas Island, at the government’s expense.

So, given the rapid spread of the virus and the latest warnings, Aussie jetsetters may be eager to know if their travel insurance will cover them in the event their travel plans are disrupted by this outbreak. We take a look:

Does travel insurance cover coronavirus?

Exclusive Canstar analysis of travel insurance policies from some of Australia’s largest insurers found there is some variation as to how different providers approach epidemics, pandemics and virus outbreaks like the coronavirus.

Canstar analysts found that CoverMore – which provides travel insurance on behalf of NRMA, SGIO and SGIC and is underwritten by Zurich Australian Insurance Limited – would not fully cover all claims caused by an epidemic, pandemic or outbreak of infectious disease.

However, CoverMore told Canstar that depending on your policy, there may be cover available for medical expenses for people who have contracted the coronavirus and have been hospitalised.

“Even if medical cover is available to you for this event, there may not be cover for travellers’ cancellation or amendment of travel plans and other additional expenses as a result of the coronavirus epidemic,” CoverMore said in a statement provided to Canstar.

“We will not pay for claims caused by or arising from an Epidemic, Pandemic or outbreak of an infectious disease or any derivative or mutation of such viruses, or the threat or perceived threat of any of these,” an update about the coronavirus “event” published CoverMore’s website on 6 February states.

“However, if you have purchased the Cancel-For-Any-Reason option (available on some of our products) and wish to cancel your trip, you can claim the non-refundable portion of the prepaid travel costs according to the terms and conditions of the policy.

“If you have travel insurance with CoverMore via your credit or debit card, this event is excluded and there is no cover.”

The website also suggests that you may also not be covered if you traveled to an area despite knowing you may be at risk of contracting coronavirus. CoverMore states that “it is a condition of our policies that you are not aware of any circumstance which is likely to give rise to a claim”.

“If you incur medical expenses with associated additional expenses as a result of contracting coronavirus, there may be cover up to the benefit limit. Our Claims Team will consider DFAT travel advices in place at the time you purchased your policy and where you chose to travel.”

On the other hand, Budget Direct’s policy documents did not specifically mention any exclusion, and stated the insurer would cover the costs of travel cancellation if customers were unable to travel because of restrictions placed upon them during or after an epidemic. But the insurer issued a travel alert on its website on 5 February, indicating that customers would be excluded from cover for claims associated with the coronavirus if their policy was purchased after 20 January.

Budget Direct’s travel alert (as of 4 March, 2020) states that its insurance policies do not cover claims:

  • “Arising from or relating to an incident and/or event which you were aware of, or could be expected to be aware of, at the time you took out this insurance and which could reasonably be expected to lead to a claim”. The site states that if you purchased your policy after 20 January, “we would expect that you would have been aware of Coronavirus”.
  • “Resulting from you travelling in, to or through a country or area included on the list of ‘Do Not Travel’ countries provided by the Australian Government through the smartraveller.gov.au website of the Department of Foreign Affairs and Trade (DFAT) or those countries subject to an embargo from the UN Security Council or from any other international organisation, to which Australia belongs, including the World Health Organisation.”

However, the site also stated that cover may still be available “if you decide to cancel or cut your trip short because a location in your planned itinerary is added or upgraded to the ‘Do Not Travel’ locations after the policy issue/purchase date and before your departure date on the Insurance Certificate”.

CGU and HBF’s travel insurance policies – both underwritten by CGU Insurance – said they would not offer cover for pandemics, epidemics or other infectious disease outbreaks if the customer’s insurance was issued after 23 January when the alert regarding coronavirus was raised.

AAMI and Southern Cross Travel Insurance policies also said any claims, costs, losses or damage would not be covered if they were associated with epidemic or pandemic illnesses, or with the outbreak of other infectious diseases. Southern Cross issued an update recently, indicating it would assess claims normally if the insurance was purchased before 12pm AEDT on 31 January, but said if customers bought a policy after that time it “would consider that you would have been aware of the outbreak”. AAMI stated it would provide cover for policies that do not have exclusions for an epidemic/pandemic if the policy was purchased before 7pm AEDT 31 January. 

AIG said it will provide cover for claims for eligible policies that were arranged prior to 24 January.

Canstar finance expert Effie Zahos said it was important for travellers to read the fine print and question their insurers to ensure they were aware of what is included and excluded on their policies, because all policies differ.

“Whether or not you’re covered can come down to when you took out your policy and whether you travelled before or after a travel warning was issued,” Ms Zahos said.

“Generally, when official travel warnings are announced, a lot of insurance policies are void, so it’s important to monitor destination warnings prior to travel.

“Always be sure to look up your destination on Smartraveller and make sure you are aware of any risks or safety advice.”

Smartraveller advised travellers that Chinese authorities may expand travel restrictions further at short notice, which could result in “significant disruption” to public transport services. Also, accommodation providers may refuse to accept guests with high temperatures, or those who have recently visited areas affected by the virus outbreak.

Travel insurance customers who are concerned about their level of cover may want to call their insurer to find out more information and check their policy’s Product Disclosure Statement.

What is coronavirus?

The virus’ official name is COVID-19, and it is part of a broad family of viruses that cause respiratory illness. The deadly SARS (Severe Acute Respiratory Syndrome) virus outbreak of 2003, that caused an estimated 774 deaths, was also a coronavirus. According to Unicef.org, COVID-19 stands for “‘CO’ stands for corona, ‘VI’ for virus, and ‘D’ for disease”, and the “19” stands for the year it was first detected, 2019. It was previously called ‘2019 novel coronavirus’ or ‘2019-nCoV’.

The new coronavirus – which has not previously been detected in humans – was initially linked to exposure to animals at a seafood market in Wuhan, but authorities have since confirmed it is spreading via human-to-human contact.

The virus can cause a range of symptoms, from mild illness to pneumonia. Affected people may experience fever, flu-like symptoms and difficulty breathing.

According to the latest reports, more than 400 people have died and over 20,000 have been infected globally, with 12 confirmed cases in Australia.

There is no vaccine for the virus at this stage, and development of such vaccines can typically take up to 10 years, but scientists in Australia made a major breakthrough. Experts at Melbourne’s Peter Doherty Institute for Infection and Immunity became the world’s first scientific lab outside of China to develop a lab-grown version of the disease, which is expected to be critical in testing potential vaccines and identifying people who may have been infected.

What locations have been impacted by the coronavirus?

A number of Chinese cities, including Wuhan, are now subject to travel bans. The infection has been confirmed to have spread to people in Hong Kong, South Korea, Italy, Iran, Japan, France, Germany, Spain, the United States, Singapore, Switzerland, Kuwait, the United Kingdom, Australia and elsewhere.

Smartraveller has raised its advice level for China and Iran to ‘do not travel’, with a warning to ‘exercise a high degree of caution’ for South Korea, Japan, Italy and Mongolia.

Health and biosecurity authorities in multiple countries have been screening airport travellers for the coronavirus, which could take several hours and possibly delay travellers further if additional testing is needed in the case of a suspected infection.

All travellers arriving from any part of mainland China or Iran to Australia, regardless of nationality, would be subject to enhanced border control measures, according to the Australian Government. Foreign nationals arriving from these countries are not allowed to enter Australia until 14 days after they have left or transited through them. Australian citizens, permanent residents and their immediate family are permitted to enter Australia but are asked to isolate themselves for 14 days after their departure.

“If you attempt to travel to Australia, either directly or indirectly, your airline will not allow you to board the flight,” the latest Border Force warning states.

Where can travellers and their family members find more information?

Smartraveller has information about the coronavirus outbreak available online for travellers, including what to avoid during your trip, and what to do if you feel sick while travelling or after returning to Australia.

The Department of Foreign Affairs and Trade said any Australians who believe they have family in the affected area of Hubei Province should contact its emergency line on 1300 555 135 locally or +61 2 6261 3305 from overseas.

The Department of Health is monitoring the situation closely and said everyone should practise hygiene measures to protect against the infection, including washing your hands, covering your mouth while coughing or sneezing and avoiding contact with wild or farm animals. The public health information line is available on 1800 004 599.

People who suspect they may have symptoms of the virus have been encouraged to seek medical attention.

What is a Level 4 – Do Not Travel warning?

The Smartraveler website states that the government issues travel warnings on a scale of 1-4, which is an indication of how risky it believes travel is to a particular destination. Level 4 – Do Not Travel warning is the most serious warning, and reflects that the government believes travel to that location is “extremely dangerous”.

The site states that all travelers should be aware of what rating applies to their destination country, and any places they may be passing through on their journey.

It notes that when travelling overseas, it is your responsibility to take care of your safety, well-being and security.

“Don’t expect the Australian Government to be able to get you out of any trouble during your travels,” the government said on its website.

It warns if you travel to a location that is classed under this official warning level, you could be at a high risk of death, imprisonment, kidnapping or serious injury.

“Make sure you have an up-to-date will, an enduring power of attorney. Designate appropriate insurance beneficiaries,” the website also warns.

Can Australians still travel to Hong Kong?

The Australian Government’s Smartraveller website’s travel advice for Hong Kong is “Exercise a high degree of caution” (current at 4 March, 2020).

“Hong Kong has introduced additional measures to prevent the spread of the novel coronavirus,” the website states. “From 8 February, a 14-day mandatory quarantine will be imposed on anyone entering Hong Kong from mainland China. Airline passengers, including those in transit, will be subject to increased health screening. Access to cross-border transport with mainland China may be unavailable or limited.”

Is it safe to travel outside Australia?

The Australian government has moved to restrict travel into Australia by people who live in, or have recently been in, China or Iran. Airports are screening many travelers for signs of the sickness, including measuring their body temperature with scanners or digital infrared thermometers. Preventative measures have been put in place in airports, such as the provision of hand sanitiser. Many travelers are also choosing to wear protective items, such as P2 masks, during transit.

While it has deemed China a ‘do not travel zone’, Smartraveller does not give a definitive answer to the question ‘Is it safe to travel overseas?’. The site recommends that travelers check any warnings – and their travel insurance – before booking a new trip and also before embarking on an international journey, as well as taking precautionary measures if you are travelling to any destination with reported cases of coronavirus.

Related story: If you had to evacuate because of coronavirus, would travel insurance help?

Smartraveller’s latest update (current at 4 March, 2020) states:

“We are monitoring closely the coronavirus (COVID-19) outbreak and its implications for overseas travel. Many countries are now reporting cases. Many are introducing new entry restrictions. These are changing often and quickly. Overseas travel is becoming more complex. You need to ensure you’re informed and prepared, not just about your destination, but about the countries you might need to transit through to get there, and home.

“We are keeping all our travel advisories under very close review in consultation with the Chief Medical Officer, the Australian Health Protection Principal Committee and our network of overseas embassies and consulates.

“In most countries, we continue to advise Australians to ‘exercise normal safety precautions’. For the coronavirus, this means taking sensible measures to minimise your risk of exposure such as practising good hand hygiene.

We have raised our advice level for six countries: China and Iran – to ‘do not travel’; South Korea, Japan, Italy and Mongolia – to ‘exercise a high degree of caution’.”

What is a pandemic?

A pandemic refers to the worldwide spread of a new disease, according to the WHO. Past examples of pandemics include the Spanish flu and the 2009 H1N1 influenza virus (commonly known as swine flu). However, COVID-19 is caused by a different virus than influenza.

This article was reviewed by our Sub-editor Tom Letts before it was published as part of our fact-checking process.

Follow Canstar on Facebook and Twitter for regular updates. 

First published 24 January.

As with all our content, Canstar’s Coronavirus coverage will always be free for our readers.


Ellie McLachlanEllie is a Senior Finance Journalist within the Editorial team at Canstar, responsible for leading the news function for the business. She specialises in covering all things home loans and housing, breaking finance industry news and monitoring financial product movements. Ellie has a keen interest in analysing data and research, and is passionate about sharing people’s personal experiences with managing money. Ellie studied a Bachelor of Journalism and Arts (Peace and Conflict Studies) at UQ and has dipped her toe in digital, broadcast and print media, including at organisations such as The Urban List, The Courier Mail, 4ZZZ and APN News & Media. Follow her on Twitter and LinkedIn.


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