Everything You Need To Know About COVID-19 Travel Insurance

14th Jan 2022 Travel News Travel Tips

Blog - Generic - Travel Insurance [HD]

From 1 November 2021, fully vaccinated Australian travellers have been able to depart Australia without an exemption. However, this is not a return to the pre-pandemic travel environment. Understandably, many would-be Aussie holidaymakers have been concerned about the impact the pandemic could have on their health and their travel plans. With the revival of the travel insurance industry, Australians desperate for a holiday can now make plans to travel with the peace of mind that they are covered if COVID-19 disrupts their trip.

There has never been a more important time to secure travel insurance. If you're planning on travelling overseas, COVID cover is as important as your passport. With many destinations making travel insurance a mandatory entry requirement, you will need to ensure that you have international coverage before you travel. Navigating what you need and what is and isn't covered can be a minefield, so we've put together a handy guide with everything you need to know about COVID-19 travel insurance.

What COVID-19 Travel Insurance Is Available?

At the beginning of the pandemic, the travel insurance industry all but collapsed. Many travel insurance providers had to exit the market altogether when financial backers and underwriters ended their financial agreements in the face of COVID-19 travel pauses. In fact, the market fell by 99.3 per cent at the start of the Coronavirus pandemic. However as travel is slowly starting to return, so too are major companies selling travel insurance according to Compare The Market's travel insurance specialist, Warren Duke.

After a rigorous analysis of all the policies on offer, TravelOnline have partnered with nib travel insurance to provide their customers with a range of great value and dependable travel insurance options. NIB is one of the biggest providers of travel insurance, with $200 million in premiums taken every year. Their policy, underwritten by new backer Pacific International Insurance, covers many Covid-related events and inconveniences.

The financial impacts of the pandemic have been far reaching and money savvy travellers may be tempted to opt with 'free' travel insurance provided by their credit card company. But the COVID-19 coverage offered is exceedingly limited or may be non-existent making it a very risky option. Looking at policies for the big four banks, all exclude pandemics as a general rule.

Always read the product disclosure statement to understand exactly what is being offered. Complimentary 'COVID insurance' might only cover COVID-19 and nothing else. Also, if the insurance is issued by an overseas insurance company, it will also be subject to the regulations of that country. In this instance, it isn't a good substitute for a comprehensive Australian travel insurance policy.

Travel Insurance & Smartraveller Advice

Provided by the Department of Foreign Affairs and Trade (DFAT), Smartraveller is a government travel advisory resource designed to help Australians travel overseas safely. The travel authority assigns overall advice levels to 177 countries and these advice levels can affect your travel insurance or ability to secure cover. The advice levels are:

Smartraveller Travel Restriction Levels [HD]

Destinations assigned within advice levels 1 and 2 are typically covered by travel insurance while destinations that fall within advice level 4 are not. If your intended destination has been assigned with a level 3 travel advisory you may want to reconsider your need to travel there, but most importantly you will need to check whether or not your insurance will cover it. International travel has become more uncertain and complex and if these levels change while you are away, it could affect what is covered under your travel insurance. Always check the details of your coverage and if you have any doubts, we're here to help point you in the right direction.

What Is Covered?

If you plan to travel overseas, you'll only be able to take out travel insurance once your chosen destination has been downgraded from Level 4 'do not travel' to a lower level. You should also consider the entry requirements of destination countries, conditions imposed by airlines as well as the arrangements for your return to Australia.

When it comes to COVID-19 protection, most policies provide cover for medical expenses incurred if you are diagnosed with COVID-19 while on holiday. You will also be able to claim against costs associated with changing your travel arrangements as a result of being diagnosed with COVID-19 before or after you leave. This includes your holiday being cancelled, amended, interrupted or cut short. It is important to realise that limits often apply to insurance payouts so be sure to check that the benefit limits for these events are sufficient for your circumstances.

If you contract Covid while on holiday, you may be required to isolate for up to 7 days in your accommodation. Ensure that your benefit limit will cover the cost of this extended stay for all travellers in your party. In most cases, these limits can be increased for a small additional cost to ensure that you are adequately covered should you need them. If you've got any doubts about calculating the right cover, talk to one of our friendly travel consultants.

Blog - Generic - Travel Insurance [HD]

Without insurance you may find yourself relying on whatever reciprocal healthcare agreements may exist, however Australia only has these agreements in place with 11 nations, including New Zealand, the UK and Italy. It's important to remember that Australian travellers are only covered for urgent medical treatment under these agreements. Often this does not cover the entire cost of treatment and medical evacuations are also not included. These agreements can be helpful in a pinch but are still no replacement for travel insurance.

For example, in New Zealand the reciprocal healthcare agreement does not cover free or subsidised care by a general practitioner or if you require an ambulance. Also, if you fall seriously ill whilst overseas, medical repatriation is extremely expensive and is only covered by travel insurance.

What Isn't Covered?

While medical expenses relating to COVID-19 may be covered by travel insurance, there are still some gaps in the product offering. Perhaps the most conspicuous omission from travel insurance policies is coverage for travel cost refunds or compensation for amendments in the event of border closures or COVID-19 lockdowns. It seems there are no policies that cover general lockdowns or government travel bans.

In an episode of ABC News program The Business, NIB's chief executive Mark Fitzgibbon explained that it was unlikely that travel insurance providers would ever offer this sort of coverage, attributing this to the underwriters who carry the financial risk of paying out policies rather than the insurance companies themselves.

"You talk to people at some of the global underwriters, and they certainly confirm that it's not an insurable risk if the entire world shuts down and closes borders. The financial consequences are just too dire" he said.

Frustrated Tourist

As a result of this gap in the market, TravelOnline have introduced our own COVID Refund Guarantee to protect our customers from financial loss in the event that Covid-19 lockdowns or border closures impact travel plans.

TravelOnline Managing Director Glenn Checkley explains:

"We've all learnt to be flexible over the last couple of years but the travel industry has perhaps had to adapt the most. A key feature that all travellers should be on the lookout for is built-in flexibility to holiday packages. TravelOnline have introduced a COVID Refund Guarantee as an optional extra to give customers complete control over their options.

This ensures that if their travel plans are impacted by the pandemic, they will receive a refund rather than having their money tied up in credits. This has proved a very popular addition to our product offering and gives our customers the peace of mind to book their long-awaited return to travel."

Can Unvaccinated Travellers Be Insured?

Both the Australian Government and World Health Organization (WHO) strongly support immunisation and advise that it is important to be vaccinated as soon as possible. If you are medically unable to be vaccinated or choose not to be, some travel insurance policies may not cover you for Covid-related claims. Ensure you read all of the fine print contained in the Product Disclosure Statement (PDS) to choose the insurance policy that is right for you.

Travellers who choose not to take the appropriate precautionary and preventative measures to protect themselves against the risk of COVID-19, including vaccination, may be subject to policy exclusions that could affect the cover available if their trip is impacted by the pandemic. In most cases, it isn't an eligibility requirement to be vaccinated in order to purchase a travel insurance policy however if you are able to be vaccinated and choose not to, this may impact the cover available to you if this choice leads to you making a claim.

This is true for all illnesses, not only COVID-19, and all travellers should be aware of the vaccination requirements for the region where they will be travelling.

Family Travel

How To Make Your Travel Plans COVID-Safe

Travelling during a global pandemic means that you need to be prepared for your plans to be impacted at short notice. Travel insurance will cover you for any medical needs arising while on holiday, including complications as a result of COVID-19, however these policies do not cover general lockdowns or government border closures. Book with reputable travel agents that allow flexibility should things change and consider the following important points:

• What are the rules and entry requirements of your destination?
• Are you better off visiting just one destination, rather than travelling to several?
• What are the terms and conditions of your booking?
• Can your hotel booking be cancelled or at least amended?
• What is the latest travel advice and requirements on the Smartraveller website?
• Do your travel insurance and benefit limits provide adequate cover for your circumstances?

Navigating post-pandemic travel has become even more complex. Whilst the demand for travel is there, holidaymakers are finding it increasingly difficult to understand complex overseas travel restrictions, vaccination passports and travel insurance options.

Demand for travel advice has spiked as Australia's borders have reopened and using a knowledgeable travel agent is more important than ever. Our friendly consultants are available to assist you in navigating all the requirements for your destination so you can relax and enjoy a well-deserved holiday.


The information contained within this site is current as at 14 January 2022. The information is only intended to be of a general nature and should not be relied upon by any party without obtaining full details of the products and services mentioned herein. You should seek appropriate independent professional advice before making any decisions.