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An Air Canada plane lands at Pearson Airport in Toronto on March 10, 2020. Ottawa has issued travel warnings for China, Iran, northern Italy, South Korea and Japan amid the coronavirus outbreak.J.P. MOCZULSKI/The Globe and Mail

Travel insurance companies have begun adjusting their policies to exclude the global coronavirus outbreak, labelling it a foreseeable reason for trip cancellations.

Typically, travellers who purchase regular trip cancellation insurance have been able to get refunds if an advisory was issued for their destination after they booked. Now, as the novel coronavirus becomes a travel concern, a number of insurers are updating their policies to no longer include the virus as a reason to honour a cancellation claim.

Allianz Global Assistance Canada is the third Canadian travel insurance company to change its regular trip cancellation policy to exclude claims related to COVID-19 for any policies purchased on or after Wednesday.

“Given the continued spread of COVID-19 internationally, [Allianz] has identified coronavirus as a known event for trip cancellation and interruption,” spokesperson Dan Keon said in an e-mail. The result, he said, is that "trip cancellation and interruption claims related to coronavirus will not be payable.”

Most trip cancellation policies have an exclusion clause for “known events.” They specify that if customers were aware before purchasing a policy of a reason or event that could cause them to cancel their trip, then that claim will not be payable.

Allianz customers who purchased coverage before Wednesday can still make a claim for trip cancellation or interruption owing to the coronavirus if the Canadian government issues a Level 3 or 4 advisory for their destination before their departure date, Mr. Keon said.

The government has issued five travel warnings, including for China, Iran, northern Italy, South Korea and Japan. As well, the Public Health Agency of Canada is recommending that Canadians avoid all cruise ship travel because of the COVID-19 outbreak.

Manulife Financial Corp. and TuGo were the first Canadian insurers to make changes to their travel cancellation policies in relation to the outbreak. The changes were made for Manulife policies purchased on or after March 4, and TuGo policies on or after March 5.

With the COVID-19 outbreak reaching more than 117 countries and more than 118,000 confirmed cases globally, both companies identified the virus as a “known event” and updated their regular policies to exclude claims going forward for COVID-19 for all travel destinations. People who have booked travel – or are looking to book – may still be covered depending on their package.

Will McAleer, executive director at the Travel Health Insurance Association of Canada, says Canadians should shop around as products in the travel industry vary.

“There are many insurers who have not made adjustments to their cancellation policies and will continue to cover countries that currently do not have an advisory warning yet, but will allow that destination to be covered should an advisory go up in the future,” he said in an interview.

Higher-priced policies – such as "cancel for any reason” packages – provide coverage for any type of trip cancellation, including the virus outbreak, although Mr. McAleer says these policies typically may only refund 50 per cent to 75 per cent of costs.

For travellers who declined cancellation insurance at the time of booking, credit card companies may be able to help. Additional travel insurance can be purchased using your credit card after a purchase has been made. As well, certain premium credit cards, usually those that charge an annual fee, already come with built-in travel insurance benefits such as emergency medical coverage and trip cancellation.

For example, the TD Aeroplan Visa Infinite Card provides trip cancellation for cardholders through TD travel insurance – which has made no changes to its insurance policy because of the outbreak to date.

The card covers up to $1,500 for every insured person to a maximum of $5,000 if you need to cancel your travel plans before you leave because of a “covered cause." Causes include travel advisories – as long as a card holder booked their trip to a country before a government of Canada travel advisory was issued. If the customer books the trip after the advisory is issued, then they would not be eligible for cancellation coverage. Travellers should also note that a refund from a credit card could limit how much you eventually receive from a claim submitted through a travel insurance company.

Airlines have relaxed their change and cancellation policies, waiving or reducing the charges for fliers wary of contracting COVID-19 while travelling.

There are time limits on free changes to flights, however, and travellers should be aware that cancelling a flight without insurance will not trigger a refund.

WestJet Airlines Ltd. and Porter Airlines customers who booked between March 5 or 6, respectively, and March 31 can change their flights without paying an extra fee, as long as they do so more than 14 days before the date of departure.

Travellers who paid WestJet’s basic fare and booked their March trip before March 3 can change or cancel their flight for fees that range from $110 to $118 for all destinations except Europe and for $250 to $295 for European cities. Until this month, WestJet’s basic fares were ineligible for changes or cancellations.

Air Canada has waived the change fee for tickets bought between March 4 and March 31, provided the switch is made two weeks ahead and the new trip takes place within 12 months. Travellers who want to cancel their trip will not get a refund; rather, the fare difference will be credited toward their next flight, and a cancellation fee will be added.

In light of the federal government’s warning to avoid non-essential travel to Italy, Air Transat is cancelling the change fees for customers flying to Rome, Venice or Lamezia between now and June 30. The waiver applies only to seats bought before March 3 (Venice) or March 10 (Rome or Lamezia).

Leisure carrier Sunwing Airlines Inc. is not waiving cancellation fees. It sells cancellation insurance for $49 for people 74 and under and $79 for people 75 and older. ​

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