Published on: 2 June 2020 by Michael Lamb
In recent weeks we’ve seen some semblance of normal return to Hong Kong. Offices are back open, people are eating at restaurants, and plans for the future are being made – including booking trips and vacations for later in the year.
Whenever Hong Kong residents travel overseas we always recommend that they purchase travel insurance to protect themselves on their trip. This is because travel insurance offers a wide range of affordable coverage protecting you against things like Healthcare Costs, lost or stolen luggage, and even cancellations.
With all the confusion around the Covid-19 Coronavirus pandemic the question has to be asked is this the right time to purchase travel insurance?
Designed to protect you against one or more risks while you are away from your country of residence, Hong Kong Travel Insurance plans from CCW Global typically allow you to receive protection against:
There are many, many travel insurance options for you to choose from. With locally underwritten products that provide exceptional umbrella benefits and are able to assist with almost any eventuality, through to specialist international products that focus on a specific coverage benefit (like health insurance), you are able to select and customize the travel insurance product which best fits your need for any trip you may take.
Generally, before you take a trip you would purchase the type of travel insurance you need and go off on your journey secure in the knowledge that should anything happen to you while you’re overseas, you will have the assistance you need when you need it.
You also have the option of purchasing annual coverage which will protect you no matter how many times you may go overseas in the course of a single year. While annual travel insurance products will have some restrictions that will apply to their coverage (each single trip must be less than 30 days in duration, for example) they offer flexibility and ease of use to individuals who will travel frequently throughout the year.
So, there are many options available for Travel Insurance coverage, and the protection offered by these plans is actually extremely robust. But what about the utility of a travel insurance product in the world of the Coronavirus? Will you actually be able to use the plan?
While travel insurance is a fairly straightforward and easy to understand there are some general exclusions which can typically be found on most policies. For example, common exclusions on Travel Insurance policies include:
The travel insurance will exclude from coverage any claim where the policyholder has committed an illegal act, suicide, or intentional self-injury. All claims which are the result of being under the influence of medications not prescribed by a doctor, or alcohol are also excluded from the plan.
As with regular health insurance policies, all pre-existing medical conditions are excluded under travel insurance plans. This means that if you suffered from a medical condition prior to departing on your overseas trip then that condition is excluded from coverage under the travel insurance plan. Furthermore, travel for the explicit purpose of receiving medical treatment is normally excluded from coverage under a travel insurance plan.
Most travel insurance plans will exclude some sort of activity, although the type of activity being excluded will depend on the insurance company you are purchasing your travel insurance from. Typically, professional sports, off-piste skiing, and any racing (other than on foot) are excluded from travel plans; meaning that a claim due to these activities will be excluded from cover.
While the previously mentioned exclusions are going to have an impact on your ability to fully utilize your travel insurance policy, in the current environment they are not the most important exclusions to be found on your policy.
Many travel insurance plans will also include exclusions for specific travel, as well as exclusions in relation to specific circumstances. Both of these exclusion classes will have the most impact on your ability to receive a claim under a travel insurance plan, especially in light of the Covid-19 Coronavirus pandemic and the large amount of unrest being experienced worldwide.
So, first things first. What are a Travel and Circumstances exclusion?
These exclusions specify where you can travel and be covered under the policy. For example, many plans will exclude any claims that have developed as a result of traveling to Afghanistan, Cuba, Iran, or Iraq. Obviously these are some unstable locations, so the decision to exclude coverage there makes sense. But in addition to these firm national exclusions there are some more fluid prohibitions that are determined on a case-by-case basis.
Depending on the country in which your travel insurance policy is underwritten the terms and conditions will normally provide an exclusion against travel to any country where the local government has place a travel advisory due to any war (or warlike event), strike, riot, civil commotion, disease outbreak or unsafe health conditions, natural disasters, or other similar events.
It is important to understand that these exclusions do not apply if the advisory or travel restriction has occurred after you have commenced your journey; in which case it would be an insurable event.
When it comes to the coronavirus there is an existing WHO Pandemic Declaration that effects, essentially, every country in the world. Because of this, any trip which is booked now and which is covered under a travel insurance policy, would not be covered due to the existing pandemic situation should the journey be cancelled.
Only after travel advisories and pandemic warnings have been removed will cancellations due to the Covid-19 Coronavirus be covered under travel insurance policies, assuming that no future specified exclusions are created to deal solely with the virus.
At present, it is advisable to check with your local authorities for current travel advisories, what they may mean for you, and the impact they will have on your travel insurance.
Resources like the Cathay Pacific Travel Advisory are available to assist you in determining the impact the virus has had on your travel insurance and travel plans.
Policies purchased prior to November 2019 for trips which have now been impacted by the coronavirus may be eligible for claim settlement. However, policies purchased after November 2019 for travel which has not yet occurred will likely have the coronavirus excluded as a cause for claims. It is important to note that this information will largely depend on the insurance company you purchased your travel insurance policy from, the specific plan you’ve purchased, and the specific details or your travel and purchase timeline.
Buying travel insurance now to cover against cancellations caused by the Covid-19 Coronavirus pandemic may not be a wise decision as any claims may not be honored due to the specific exclusions insurers have in place regarding unsafe overseas situations. This is another insurance area in which the situation is developing and only time will provide a clear and accurate picture as to what the reality is.
If you have any concerns about your Hong Kong Travel Insurance policy, the impact that the Covid-19 Coronavirus has had on your insurance or your future travel plans, or if you would like to discuss how you are able to better protect yourself in this trying time, please Contact CCW Global Today and speak to one of our expert brokers.