Coronavirus and Travel Insurance Cancellations

Travel insurance is supposed to provide you with peace of mind, but often it causes additional anxiety because the insurer refuses to honour the policy.

This may become an issue with the widespread cancellations happening now because of the coronavirus.

Canadian Insurance Providers Cancelling Coverage

Three Canadian travel insurance providers – Manulife, TuGo and Allianz Global Assistance Canada – are no longer providing trip cancellation insurance for travel upended by the COVID-19 outbreak.

Manulife claims that coronavirus is now a “known” event, meaning cancellation coverage will no longer apply for individuals who obtain insurance policies starting March 5, 2020.  The insurer said that their “Cancel for Any Reason” option will, however, cover cancellations due to COVID-19.

TuGo is following the same reasoning in their decision to refuse coverage, which took effect on March 4, 2020.

Allianz is changing their regular trip cancellation policy to negate claims connected to coronavirus. This will take effect on policies purchased on and after March 11, 2020. The company also now identifies COVID-19 as a known event, and says that trip interruptions related to the outbreak will not be payable.

Why are insurance companies cancelling coverage over coronavirus?

Insurers are trying to balance their legal obligations under travel policies they sold, with the massive financial loss that is approaching them like a glacier in the open sea.

Remember that insurers are in the business of making a profit. They pay only when they absolutely have must, and often times they will refuse claims or deflect them to try and avoid paying.

My advice:

• Don’t take their denials and deflections at face value, and don’t trust the excuses they may throw at you for refusing to refund you the cost of your trip if the travel insurance policy you purchased entitles you to a refund.
• Don’t be afraid to ask questions and confirm your conversations with the insurance representative in writing (email is fine).

Any exclusions the insurer relies on to deny your claim must be unambiguous. Remember that any ambiguities in insurance policies (of any kind, not just travel insurance policies) are legally interpreted against the insurer.

Exclusions must be precise and fit exactly your situation; otherwise they are arguably not applicable.

If you are facing an insurer who refuses to refund you the cost of your trip, be it a cruise, a flight, a hotel stay, etc., under your travel policy because of the coronavirus, contact Samfiru Tumarkin LLP immediately for a free consultation regarding your legal rights.

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