Overseas Covid travel cover for New Zealanders as insurers live with pandemic risk

Known risk: Coronavirus has begun to be covered by some insurers, despite the ongoing Pandemic. Photo / Can Yilmaz, Unsplash

As Covid restrictions ease travel insurers are rewriting their policies to account for a scenario where we return to travel with cases of coronavirus still in the wild.

The prolonged nature of the Coronavirus pandemic has mean that some insurers are now offering travellers cover for disruptions and medical claims resulting from Covid 19.

While this is welcome news to those planning travel to Australia or elsewhere, it is a remarkable departure from the norm.

"While there will still be a general exclusion for epidemics and pandemics, meaning lockdowns and mandatory quarantines will not be covered, cover will be in place if travellers contract an epidemic or pandemic disease such as Covid-19 after purchasing their policy and can no longer travel," reads the New Zealand policy underwritten by Allianz Partners.

There is also provision for travellers "who contract the disease after they commence their journey."

This would be the first time that travel insurer updated policies to cover a disease that is subject to an ongoing pandemic.

"As a post-pandemic world feels within arm's reach, we know many Kiwis are thinking about how to travel responsibly and how to get appropriate cover," said Blair Turnbull, chief executive of Tower Insurance, which is to begin offering Covid 19 cover to travellers.

Those calculating the risk have decided the challenge of dealing with the disease in New Zealand's safe travel zone is manageable, jumped the gun before the World Health Organisation downgrades the Covid-19 pandemic.

Another reading of the decision is that the underwriters now consider coronavirus a travel risk we will have to live with, for the foreseeable future.

The policy reflects Covid as a personal medical claim. This means that travellers will only be covered for missed travel if the insured party catches the disease.

Disruption such as local lockdowns or new travel restrictions are not part of this.

Pandemic travel cover

Pandemics and epidemics have long been considered a 'force majeure' by insurers.

Anyone caught up in the travel lockdowns of March 2020, will have found the clause buried in the small print.

These large, uninsurable events have traditionally been set aside as exceptions for travel insurance cover.

However, now contracting or having plans disrupted by Coronavirus is a "known risk" with the onus on New Zealanders to avoid the risk of travel.

"Like a storm that's on its way or the coronavirus (COVID-19) pandemic. These would not be unexpected events, " reads Southern Cross's TravelCare policy guidance.

"A reasonably well-informed person would have seen that these events could cause problems for travellers."

However as the New Zealand government eases travel restrictions and updates advice for Australia and the Cook Islands, New Zealanders are no longer being advises not to travel.

MFAT's Safe Travel advice for quarantine-except countries is "Exercise increased caution" in Australia and the Cook Islands.