Coronavirus: Few insurance companies covering pandemic cancellations

Chinese tourists wear protective masks while visiting Bangkok, Thailand last month. Photo / Getty Images

House of Travel director Brent Thomas told RNZ's Checkpoint that bookings for cruises had dropped by double digits, and they had also seen an increase in customer postponements and cancellations.

"We've seen significant number of people coming into the stores and enquiring about it," he said.

"Cancellation wise ... it's still a lot less than 10 per cent ... the postponement or delaying of bookings is in the double digits but certainly nowhere near half."

He added that the virus would mean major travel discounts.

"Ultimately airlines, hoteliers, car rental companies, they've all got assets that they have to keep moving to create revenue. So there'll be some fantastic deals coming for the New Zealand public and there will be a significant number who still travel in 2020."

Celeste Ryall, also from House of Travel, told the Herald coronavirus had meant the immediate plans of some travellers had been affected and travel consultants were fielding "plenty of questions".

"Kiwis are still wanting to travel and explore the world. Sales and enquiries for holidays to destinations outside of North Asia are still very strong."

For destinations outside of Asia, the majority of customers were continuing to travel as planned, however some were choosing to defer travel where possible and a small number had opted to cancel their plans, she said.

"Our advice to consumers is to follow the travel advisories published by Safe Travel NZ. If travel is not recommended to a destination by this body, then we advise customers that they should follow this advice."

As for insurance and whether it covers pandemics, Ryall said they varied depending on the policy but most wouldn't provide cover.

"Most will not cover any losses incurred if a customer chooses not to travel due to concerns with coronavirus. We have always encouraged customers to purchase travel insurance and this situation is no different."

A spokesperson from Flight Centre NZ said China was a major market for travel, especially among its corporate sector.

"So of course, there have been a number of changes with flights canceled into the country. We don't yet know the full impact that this will have.

"In regards to leisure, we're finding that Kiwis are eager to postpone or redirect their travels to unaffected areas if necessary. There are hundreds of amazing destinations that are safe to travel to at this time."

The bonus was that there were "amazing deals" coming onto the market as airlines were compensating for canceled routes into affected areas.

"It's a great time to book affordable flights trans-Tasman or to the Pacific Islands."

As for insurance, the spokesperson said "many travel insurance policies exclude losses caused directly or indirectly by an epidemic or pandemic, so with the recent update, it's really important that travellers are choosing their provider and policy carefully - especially take note of the 'exclusions' section in your policy".

However, Cover-More travel insurance will cover personal medical expenses from the virus regardless of the epidemic status - provided the country or territory of travel is not listed as not safe for travel, as determined by NZ Ministry of Foreign Affairs - only China
at this time.

The company also offered "cancel for any reason" cover, which allowed a traveller to cancel their travel for any reason and claim up to 75 per cent back.

Tim Grafton, chief executive of Insurance Council of New Zealand (ICNZ), urged people to speak with their insurer to clarify what cover they may have as the coronavirus situation continues.

''While some insurers continue to offer cover, all of our members have issued travel advisories specifying the cover they offer and the restrictions on this cover since this became a known event in late January."

"Many insurers are regularly updating their advisories with additional guidelines on what cover may or may not be available under their policies specifically in relation to coronavirus."

However, he said that it was still important to purchase travel insurance at the point of purchasing travel for the wider cover it offers.

"Travel insurance is still available to purchase and still offers cover for a variety of unforeseen events.

"Even if cover is restricted in relation to coronavirus, it is important to remember that travel insurance still offers cover for other unforeseen events as outlined in individual policies - such as a broken leg, lost baggage or the impacts of a significant weather event."