Will travel insurance be cheaper for vaccinated travellers?

Senior News Journalist · 24 November 2021
Travel insurers say they aren’t currently planning to discriminate on price between vaccinated and unvaccinated travellers once Australian borders open up for international travel, Canstar can reveal. This will be watched closely, given risk factors generally do affect the cost of most types of insurance.
Travel insurance vaccines
Canstar investigates what travel insurance providers are planning to do with policies once international travel opens up. Image: Sam Wordley/Shutterstock.com.

The prospect of international travel is right around the corner.

Australians have been promised overseas travel will resume once 80% of those eligible are fully vaccinated, while vaccine passports for international travel is set to be available within weeks and Qantas is gearing up to start flights to a handful of countries with high vaccination rates from mid-December.

What will be interesting to see is how travel insurance will work, as providers head into the largely uncharted waters of insuring Australians who are able to travel freely to other countries (other than New Zealand, at times) during a pandemic.

One thing travellers might be wondering is how their vaccination status could impact the cover and pricing of travel insurance.

A spokesperson for Cover-More told Canstar the insurance provider was not considering pricing vaccinated and unvaccinated travellers’ policies differently “at the moment”.

Nor was Cover-More currently considering asking for a person’s vaccination status as part of a policy application, or how a person with a formal medical exemption from being vaccinated for COVID-19 might be affected when seeking to be insured to travel.

Of note, Cover-More did not explicitly say whether these decisions would be the case permanently.

Fellow travel insurance provider nib told Canstar it would not ask any questions regarding vaccination when travellers purchase a policy, and premiums would not be impacted by a person’s vaccination status.

However, it’s important for travellers to know that our policies contain exclusions for failure to observe appropriate preventative measures for the travel region as outlined by the World Health Organization, including relevant vaccinations,” an nib spokesperson told Canstar.

Travellers who were medically exempt from receiving the COVID-19 jab would assessed on a case-by-case basis as to whether any exclusions should apply, an nib spokesperson said.

Canstar money expert Effie Zahos said it was interesting to see these Australian travel insurance providers say they were not planning to price discriminate between vaccinated and unvaccinated travellers at this early stage, but she warned the boundaries could change with insurance.

“When you look at the model of insurance more broadly, providers do often discriminate on price. Price discrimination is generally factored into the cost of an insurance policy,” Ms Zahos said.

“Take a look at home and contents insurance. If you live in a flood-prone area you’re going to pay more than someone who doesn’t, and if you live in a bushfire zone you’re going to pay more too.

“With car insurance, if you’re under 25 or if you’ve got a bad driving history, you generally pay higher premiums.”

“So it’s an interesting position that travel insurance providers are finding themselves in now. Time will tell if they maintain their stance on vaccines and policy pricing.”

Ms Zahos noted the buck would stop with the airlines to an extent, in terms of whether they allow unvaccinated travellers to fly.

Both Cover-More and nib said they were not currently considering any financial incentives such as discounts or “perks” for vaccinated travellers, but others in the insurance industry have indicated this could be on the cards.

Life insurance provider TAL, for instance, has previously said it was considering offering premium discounts to customers who had been vaccinated against COVID-19, but has so far not implemented this.

Health insurer Medibank is offering 1,000 rewards points to fully-vaccinated customers, with the points able to be redeemed on buying items such as gift cards or smart watches, getting a premium discount or receiving more money back on extras like a remedial massage.

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