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COVID-19 travel insurance coverage: what’s changed in the last two years?

June 17, 2022
3 mins
A close-up of someone packing a yellow shirt in a suitcase

After two years of sticking closer to home, Canadians are gearing up for a summer of far-flung vacations.

Flight and hotel bookings have surged past pre-pandemic levels. And trip cancellation purchases are up nearly 1,200% year over year, according to a RATESDOTCA survey from late May, as travellers seek to guard against COVID-19 or other issues leaving them out of pocket if they’re forced to cancel their trip.

Travel insurance for COVID-19 has gone through various iterations since the start of the pandemic. We’ve summed up everything you need to know about how these insurance policies have changed with the times, and what approach insurance companies are now taking toward COVID-19-related claims.

Trip cancellation and interruption insurance

According to Martin Firestone, travel insurance consultant and president of Toronto-based travel insurance agency Travel Secure Inc., COVID-19 became a “known event” on March 11, 2020, the day the World Health Organization declared the coronavirus a pandemic.

Any travel insurance policies purchased after that date won’t cover claims for trip cancellations related to government travel advisories, new restrictions, or border closures in your destination country, or anxieties around travelling to a country where case counts are rising. Firestone says this has remained consistent across providers and throughout the pandemic.

However, policies should cover cancellations related to contracting COVID-19 ahead of your trip and needing to isolate and recover, Firestone says.

Most trip interruption coverage will cover policyholders who test positive while out of province or country and have unexpected hotel, meal, and return airfare expenses — something that Firestone notes was particularly important for travellers before Canada waived its requirement for pre-arrival PCR testing for fully vaccinated Canadians in February.

Insurance providers have taken varying approaches to covering claims if the policyholder tests positive in a country under a government advisory warning against non-essential or all travel.

Medical insurance

Earlier in the pandemic, some insurance companies recognized Canadians might still need to travel and introduced specific COVID-19 riders with caps at lower coverage amounts, such as $250,000, $500,000, or $1 million, while others excluded it altogether. That’s since changed now that vaccinations have lowered the risk of catching the virus, Firestone says.

“I think insurers adapted to what they had to, and when they saw the risk was lower, they adapted back to not having an issue with COVID coverage and just including it [in the base policy],” he says. “I would say we’re pretty back to normal [now].”

Insurance companies now insure emergency-related COVID-19 hospital and medical expenses similarly to other unexpected medical emergencies. They have largely integrated virus-related medical coverage into existing travel medical plans or introduced new standalone products or riders.

Vaccination status may determine coverage limits

While COVID-19 trip insurance is broadly available now, your vaccination status may impact the level of coverage you’re eligible for.

Some providers, like CAA and its provincial member associations, have different coverage amounts for fully vaccinated, partially vaccinated, and unvaccinated travellers. For instance, CAA provides $2.5 million in emergency medical coverage if partially vaccinated, or up to $5 million if fully vaccinated. Children who aren’t yet fully vaccinated are often exempted from these requirements.

As of June 20, the federal government is lifting the vaccination requirement for domestic travel, though Canadians re-entering the country will still need to meet entry requirements.

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Kelsey Rolfe

Kelsey Rolfe is a freelance journalist and editor based in Toronto. Her work has appeared in the Globe and Mail, Toronto Star, Maisonneuve Magazine and TVO, among others. She's generally pretty good at budgeting and saving, but can't seem to stop impulse buying books.

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