With five cases of coronavirus confirmed in New Zealand and over 100,000 globally, many people’s travel plans have been put into jeopardy, and insurers have started issuing travel advisories - therefore affecting cover for claims associated with the outbreak.
The Insurance Council of New Zealand (ICNZ) has urged customers to contact their insurers if they have questions around the scope of their cover, and has confirmed that all of ICNZ’s members have issued travel advisories. Chief executive Tim Grafton said that pandemics and epidemics are “generally not insurable,” though some travel insurers are continuing to offer some level of cover - however, Grafton says that despite the limits, insurance is still vital for anyone looking to travel.
One of the largest travel insurers operating in New Zealand, Cover More, recently issued a ‘cancel for any reason’ add-on which will cover cancellations related to coronavirus, and its main policies will still cover any claims in countries for which it has not issued a travel advisory. Eftim Stojanov, general manager - underwriting and product NZ at Cover More, says the add-on should give customers the security to go ahead with their travel plans.
“With our add-on, a customer is able to specify the level of cancellation cover that they want per policy,” Stojanov told Insurance Business. “This gives them flexibility in terms of claims payments.”
“The add-on means exactly what it says - they can make a cancellation for any reason whatsoever,” he explained.
“The product has a self-policing mechanism which imposes a 25% excess on the cancellation, and has an upper limit of $10,000.”
Stojanov noted that with regards to safe travel warnings, it has only issued those for travel to China and Iran, so insurance for travel outside of those countries would still be valid.
“Our underlying policies cover medical and dental expenses for the coronavirus, and the only limitation on that is with regards to safe travel warnings,” he stated.
“So, for travel to China or Iran, your cover could be affected. But if you’re travelling to Italy - for which we have not yet issued a travel advisory - you will be covered.
“One of our mission statements is to keep people travelling, so we’re also supporting the travel industry in these challenging times. By offering this level of coverage, people don’t have to worry about money being lost.”
Will Ashcroft, general manager of distribution at Cover More, says he has been looking to develop a ‘cancel for any reason’ add-on for some time, and believes it is currently the only insurer with the offering in Australia and New Zealand. Stojanov noted that some insurers may be looking at developing a specific policy for coronavirus, though this is not confirmed.
“We’re finding that a lot of consumers really want to book their dream trip and they’re really excited, but they’re still a bit nervous about putting money down,” Ashcroft explained.
“Nobody knows what’s going to happen. So, we’re finding this really allows people to book with confidence - if for whatever reason they don’t want to go, or they can’t go, they can get 75% of their money back.”
“We’re trying to keep our stance consistent and send out really simple information so that people can easily understand it,” he continued.
“But we have had a 65% increase in call volumes over the last few weeks and a 400% increase in emails. We have a localised proposition here, so we have people sitting in Auckland, and we’re just doing our best to keep people informed and hopefully ensure that they can still travel.
“The message is really that there is cover, there is protection, and people should be able to book their travel with confidence.”
