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“If I Cancel My Trip Because of COVID-19, Will I Be Covered by My Travel Insurance Policy?”

As new cases of COVID-19 continue to spread, Canadians may be asking themselves if it is worth it to travel right now. Canadians with trips already booked may be asking: can I cancel my trip and still be covered?

The answer: it depends.

When booking a trip, you have the option to accept the standard travel insurance policy that comes with your booking or pay more for “cancel for any reason” (“CFAR”) protection.

If you have purchased CFAR protection, you are able to cancel your trip for any reason, including cancelling for fear of the COVID-19 pandemic. CFAR protection is typically purchased within a few weeks of booking and tends to be expensive.

A standard travel insurance policy, on the other hand, will not cover you if you are solely cancelling your trip for fear of the COVID-19 pandemic. A standard travel insurance policy will only cover your cancellation if the Public Health Agency of Canada (“PHAC”) has issued a level 3 or level 4 travel advisory for the region you are visiting.

The PHAC issues four possible risk levels when issuing travel advisories for specific destinations:

• Level 1 – Exercise normal security precautions
• Level 2 – Exercise a high degree of caution
• Level 3 – Avoid non-essential travel
• Level 4 – Avoid all travel

The PHAC currently recommends that Canadians avoid non-essential travel to China, Iran and Northern Italy. The PHAC has also issued special warnings with respect to cruise ships, advising that all Canadians should avoid travelling on cruise ships to protect themselves and others from spreading the virus.

Therefore, if you booked a trip to China, Iran or Italy, you may be covered under your standard travel insurance policy. However, all other destinations, at this time, would not be covered.

Keep in mind that the COVID-19 pandemic is fluid and changing every day. It is important to regularly check the PHAC’s website to monitor the travel advisories for your prospective destination.

To further complicate matters, some travel insurance carriers have recently announced that they will only cover trip cancellations due to Level 3 or Level 4 advisories if the advisory was issued after the trip was booked.

To that end, some carriers are stating that trips booked after a certain date (March 4 or 5, 2020) will no longer be covered for cancellations due to COVID-19 travel advisories – even if the travel advisory is issued after the trip is booked. These carriers have determined that, beyond March 4 or 5, 2020, COVID-19 would be considered a “known circumstance.” Travellers who chose to book trips with knowledge of the COVID-19 pandemic would be subject to this exclusion.

UPDATE: As of approximately 12:30 pm on March 13, 2020, the Government of Canada is asking Canadians to avoid all non-essential travel outside of the country. The PHAC website is yet to be updated. It is unclear whether this translates to a Level 3 (avoid non-essential travel) for all destinations outside of Canada. If that is the case, you may have a strong argument for your trip cancellation to be covered under your standard travel insurance policy. This is subject, of course, to the few travel insurance carriers that have placed an exception for trips booked after March 5, 2020.