Two major travel insurers are reinstating out-of-country medical coverage for COVID-19 even as the federal government continues to advise Canadians against non-essential travel outside the border.
Medipac Travel Insurance and two plans of the Canadian Association of Blue Cross have restored medical emergency coverage for the novel coronavirus in their travel insurance policies this month. Three other major Canadian insurers are notifying customers they will restore coverage for COVID-19 but only once travel advisories are lifted by the Canadian government.
After suspending sales last March in Ontario and Quebec, Blue Cross has reopened individual sales for travel insurance products as of Wednesday. In a memo sent to insurance brokers, Blue Cross said certain individual policies will cover COVID-19 – even with “high-level travel advisories” in place – as long as a policy holder has not shown any symptoms prior to their effective contract date.
Medipac, which sells travel medical insurance to the Canadian Snowbird Association and Royal Canadian Legion, updated its policies last week to allow customers to book single-trip insurance policies for out-of-country emergency medical coverage that includes COVID-19, effective immediately.
Joan Weir, director of health and disability policy at the Canadian Life and Health Insurance Association, said it is “surprising” that insurers are offering coverage for COVID-19 while travel advisories remain in effect, but with the coronavirus starting to relent in some regions, there could be an increase in tourism.
“For many places in the world, COVID is calming down and certain countries are starting to open back up,” Ms. Weir said. “For some travel insurers they may see the need to offer coverage for those areas, but travellers should take extra precaution – even when travel advisories are lifted.”
Despite the surge in cases south of the border, Christopher Davidge, vice-president of marketing for Medipac, said many Canadian snowbirds own residences in the southern United States and are able to physical distance “just as effectively abroad, as they are here in Canada.”
“We are aware of the high number of COVID cases in certain regions but we do not think the risks will impact the particular demographic of our clients,” Mr. Davidge said in an interview. “These individuals tend to be more mature, are more aware of the virus and the preventative measures that should be taken while travelling.”
For many Canadians, particularly snowbirds who begin to plan their winter getaway months in advance, the uncertainty of travel insurance has stalled the travel industry altogether, said Martin Firestone, president of Travel Secure and an insurance broker in travel medical coverage.
“The decision to fly right now – even with medical coverage – is a scary scenario,” said Mr. Firestone, a 21-year veteran in the travel insurance industry. “The availability of medical resources can be strained in certain regions and ICU beds may be at capacity, therefore reducing the availability of emergency services to individuals – even for non-COVID medical treatments.”
Travel insurance helps people who have to cancel trips, or receive medical care outside Canada, because of unforeseen events. Policy coverage can range from $2-million up to $10-million a person.
As the coronavirus pandemic hit North America in early March, high-level travel advisories were issued by the Canadian government, warning Canadians to avoid all non-essential travel. The advisories also had a ripple effect on the insurance industry as they eliminated any out-of-country medical coverage for COVID-19.
Travel advisories are issued as warnings to travellers when leaving the country, and can range in severity. Canada currently has a Level 3 advisory in place for most international destinations, which is issued during a large-scale outbreak and asks travellers to avoid non-essential travel outside Canada. The highest warning – Level 4 – advises people to avoid all travel in order to limit the spread of disease.
Even with travel advisories still intact, and the border to the U.S closed to non-essential travel until at least Aug. 21, other major insurers are advising customers of the type of coverage to expect in the future.
Insurers Manulife Financial Corp., Allianz Global Assistance Canada and TuGo sent out notifications to clients that coverage for COVID-19 will be restored once travel advisories are lifted by the Canadian government. All three insurers have excluded medical claims for the coronavirus as of March 13.
“Once the [government travel advisory] is lifted, COVID-19-related medical conditions will be covered for international destinations,” TuGo chief claims officer Mike Starko in an e-mail to The Globe and Mail.
Dan Keon, spokesperson for Allianz, confirmed that the “majority” of travel medical policies offered by the insurer will provide coverage for medical treatment related to COVID-19, “as long as there is no government of Canada travel advisory in place for the traveller’s destination country or region on their date of departure.”
Last week, Manulife sent an industry update to insurance brokers confirming if there is “no travel advisory in place for their destination at the time of departure, emergency medical treatment related to COVID-19 will be payable, subject to the terms of the policy.”
Even when the Canadian government begins to lift its travel advisories, international travel – even a day trip to the U.S. – will still carry the risk of COVID-19, said Ms. Weir at CLHIA.
Trip cancellation will continue to be a red flag for travellers as a majority of insurers continue to exclude COVID-19 from cancellation policies.
CLHIA recommends Canadians consider “cancel for any reason” trip cancellation coverage that is more flexible around reasons for trip cancellation, although these policies typically can be more expensive.
“There are new health requirements to meet when boarding your flight and trip cancellation insurance is not intended to pay expenses if denied boarding,” Ms. Weir said. “As well, travellers should be prepared to return to Canada quickly should the government raise the travel advisory level again.”
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