How Travel Insurance is Changing with New Rules Taking Effect

at the airportRecent federal government announcements of eased travel restrictions have finally given the travel industry concrete hope of recovery.

Tied to the lifting of travel advisories themselves has been the expectation the move would ‘reset’ travel insurance terms and conditions to give Canadian travelers the security of proper coverage in the post-pandemic travel environment.

Travel insurers have confirmed that generally, Ottawa’s relaxation of travel advisories will make it easier for Canadian pax to get travel insurance in the post-pandemic travel world.

At the higher level of travel risk advisory, some travel insurance providers “weren’t in the position to offer coverage,” explains a report in an insurance industry publication.

Last month, as Open Jaw reported, the federal government reduced its risk assessment for international travel to a Level 2 - advising travellers to follow increased health precautions - from its previous Level 3 advisory against all non-essential travel.

While insurers and policies vary, at least one insurer confirms that change does trigger coverage for its policyholders.

“Emergency medical expenses related to COVID-19 are now eligible under our standard plans," confirmed Julia Koene, a spokesperson for Allianz Global Assistance Canada.

But there's at least one catch. That's "as long as on the policy effective date, there is no Level 3 or Level 4 [avoid all travel] travel advisory related to COVID-19 in effect at the destination,” she pointed out. (Open Jaw's emphasis added.)

Other insurers had been offering COVID coverage regardless of the Canadian government’s  travel advisory. One of those companies is TuGo, which began offering full emergency medical assistance to vaccinated travel clients in the fall of 2021.

The company has seen an increase in travel insurance purchases since Ottawa’s announcement in FEB.

What's more, chief customer officer of TuGo, and past president of the Travel Health Insurance Association, Brad Dance, adds, “We anticipate even more uptake now, with the testing requirements ending,” on Friday, 01APR.

Tips for Travel Advisors

Both providers have some important advice for Canadian travellers and their travel advisors selling them insurance. The companies say that trip cancellation (prior to departure) and interruption coverage (during the trip) is more important than ever.

However, Allianz’ Koene says, in that company’s policies, COVID remains a “known event” for both benefits.

“For policies with trip cancellation and trip interruption benefits that were purchased on or after Mar. 11, 2020, any trip cancellation or trip interruption claims related to previous or future Government of Canada travel advisories connected to COVID-19 will continue to not be payable,” she advised.

So any new change in government travel advisories could still affect coverage even on policies purchased today.

The takeaway for advisors is that while the new government travel regulations are opening up travel once again, the fine print of travel insurance policies means it’s more important than ever for advisors to stay on top of both government advisories and their continued impact on travel insurance policies to best serve their clients.

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