'The only type of travel insurance' you need if you're traveling during the coronavirus outbreak

Foreign travelers wearing masks walk past a departures information board at Beijing International Airport in Beijing, China, as the country is hit by an outbreak of the new coronavirus, February 1, 2020.
Jason Lee | Reuters

As the coronavirus outbreak spreads, many cases have occurred in countries that are popular international tourist destinations, including China, South Korea, Japan, and Italy. This scare prompted a 60% jump in insurance policies sold in the United States during February, according to InsureMyTrip.

If you have booked a flight, hotel, tour, or other travel arrangements and you're now nervous about traveling, here's what you need to know about how your travel insurance will and won't cover you.

If I cancel my trip because of coronavirus, will my travel insurance cover me?

Most kinds of travel insurance only cover you if you cancel your trip because of a reason covered in your policy. Covered reasons vary by policy, according to travel insurance search engine Squaremouth, but three of the most common are:

  • A significant injury, illness, or death affecting you, a traveling companion, or a family member
  • Severe weather that prevents you from reaching your destination
  • A terrorist attack at your destination

Coronavirus isn't likely to fall under a covered reason unless you can't travel because you have it. "The event impacting the trip must be listed on the travel insurance certification and unfortunately, viral outbreaks are not covered," says Kasara Barto of Squaremouth.

What you need to know about travel insurance as coronavirus spreads

Plus, the coronavirus outbreak is now a known risk that is expected to disrupt travel, so insurers would exclude it from newly purchased coverage, according to a Squaremouth explainer.

This holds true if you buy insurance through one of the businesses you are patronizing on your trip (an airline, hotel, or car rental service), or if your credit card provides you with travel insurance upon purchase of your trip, Barto says.

Even if you're not covered, Barto suggests calling your airline, hotel, and other travel operators directly. Many airlines are waiving change fees for travelers who planned to travel to destinations where the outbreak has worsened. And Barto says she's heard that many companies are making exceptions for people wanting to cancel or postpone their trips.

I haven't bought my tickets yet. What insurance should I get?

If you have any upcoming trips this year and want to make sure you're covered for any coronavirus-fueled worries, buy so-called "cancel for any reason" travel insurance. True to its name, this kind of insurance lets policyholders cancel trips for any reason. "That's the only type of travel insurance policy that will cover travels for those concerns," Barto says.

If you recently booked your travel, you might still get a policy as an add-on. After purchasing your flight, you usually have somewhere between 14 and 21 days to get "cancel for any reason" insurance, Barto says.

However, this insurance is pricier, warns Jesse Neugarten, CEO of Dollar Flight Club. "These top-tier insurance plans are ideal for the current travel climate," he says. "The only drawback that you may consider is that these policies can cost as much as 50% more than a standard travel insurance policy."

These policies can cost as much as 50% more than a standard travel insurance policy.
Jesse Neugarten
CEO of Dollar Flight Club

The typical travel insurance policy usually costs between 4% and 8% of the price of the trip, according to Travel Insurance Review. But premium plans, including "cancel for any reason" coverage, can cost closer to 10% to 12% of the total trip.

What places are unsafe to travel?

As of March 10, China, Italy, and South Korea are among the countries on the Center for Disease Control's Warning Level 3. This means the CDC is advising "travelers avoid all nonessential travel to the following destinations," according to their site.

Japan is on Alert Level 2, which means that "older adults and those with chronic medical conditions should consider postponing nonessential travel." Hong Kong is on Watch Level 1, but the CDC makes no recommendation of postponing travel.

As for cruises, the CDC recommends travelers "defer all cruise ship travel worldwide," especially if you have an underlying health issue.

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