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Insuring COVID 19

Most of my clients get general travel insurance. Most now realize though, that their insurance generally doesn't cover something called exclusions. And epidemics are one of those exclusions.

Exclusion - what's on your list?

Most of the travel insurance we sell is the Allianz Journey policy. Allianz is a very respected name in the insurance industry and the Journey policy is a great tradeoff between cost and coverage. So we thought we'd look at what's on their exclusion list.

The first two are easy:

  • Any loss, condition or event that was known foreseeable , intended or expected what your policy was purchased.
  • Pre-existing medical conditions except as waived.

I say these are easy because frankly, if you know of a situation and buy insurance to cover it, that's insurance fraud.

Other specific knowable things: pregnancy, mental or nervous disorders, abuse of drugs, intentional self harm, participating in high risk sports like bungee jumping, skydiving, for scuba diving without a dive master.

And then there's the general stuff:

  • Epidemics
  • Natural disasters
  • Nuclear contamination
  • War
  • Civil disorder
  • Terrorism

There it is - Epidemics

Sure enough, epidemics are on the list of exclusions. This means, of course that if an epidemic is declared (typically by the World Health Organization), travel insurance can not be claimed as a reason for cancelation.

Imagine if there was no exclusion for this. Then, in the case of an epidemic, the insurance company would have to pay out claims on virtually all their policies. And quite quickly, they would go into bankruptcy. Insurance works on a probabilistic basis - some policies pay, some don't. But if insurance has to pay out on 100% of their policies, there just isn't enough money to do that. And so they protect themselves with exclusions.

So why buy insurance?

So if the insurance doesn't cover epidemics, why bother getting it? Because, in times when there's no epidemic - which is most of the time of course - there's still reasons you need protection. Like you or a family member gets sick or broke a leg. Or you need medical attention while traveling.

I've never heard a client regret purchasing insurance but I've heard plenty regret they didn't purchase it.

Here's some more specific information on travel insurance

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