COVID Insurance Takes Off; How to Respond to Criticism of the Trend that’s a Lifeline for Travel

Lynn Elmhirst, Open Jaw Trends Editor

Then there were three.  No, four. It’s a domino effect.

Two weeks ago, Air Canada Vacations announced it would be including free-of-charge insurance for its guests against medical and quarantine expenses related to contracting COVID-19 while travelling. The coverage is for up to 21 days and applies to ACV packaged holidays to Mexico and the Caribbean this fall and winter. The initiative is in partnership with global insurance giant Allianz and ends in April. 

While not the first globally to offer COVID-19 insurance it was a breakthrough moment for the Canadian travel industry: the first insurance covering Canadian travellers for the disease since the spring, when COVID-19 became a ‘known factor’ and therefore not covered by standard travel medical insurance.

Insuring a Return to Travel

I’m not alone in believing that COVID insurance represents the best hope of recovery for the travel industry pending widespread vaccination against the virus.

Canada remains under a Level 3 travel advisory. Surveys inform us that under half of Canadians don’t want to travel during COVID**.  And almost all Canadians are in favour of keeping the US/Canada border closed until the situation in the States improves****.

But we’re also told that 36% of Canadians who take COVID precautions, including following hand washing, masking and distancing guidelines, also want to be able to travel**. And a third of Canadians*** want to travel even without a COVID-19 vaccine.

COVID insurance coverage provides Canadians who do want to travel the confidence to book.

It wasn’t hard to predict Air Canada Vacations’ bold move would start a trend.

Flight Centre Adds More Destinations

Flight Centre quickly announced its own included COVID insurance program, also in partnership with Allianz. 

As in the case of ACV, the insurance applies only to flight + accommodation packages. But Flight Centre expands coverage to many more destinations, including, in addition to the Caribbean and Mexico, Central America, Europe, Asia, Africa and Australia/Oceania.

WestJet Adds Air-Only

Air Canada’s rival WestJet then upped the ante, offering its vacation package guests - as well as air-only passengers - no-charge COVID-19 insurance lasting up to 21 days through provider TuGo. WestJet’s COVID insurance covers travel to the Caribbean, Mexico, and Europe including the UK. 

And while the first two programs provide coverage on reservations through April, WestJet’s program runs to the end of August, 2021.

Cue the Naysayers

But just as ACV’s COVID insurance coverage triggered applause from travel advisors and many travellers – as well as a landslide of similar programs among other travel companies -  it was also the target of criticism in mainstream media reporting.

Here’s one example of an article* quoting a private researcher:

“…this type of vacation coverage sits at odds with what Canadian leadership and public health officials are saying...

“The last thing we want to do is be sick, to be in the hospital, or put someone we care about in that situation because we are enticed by messaging about a bonus if I go… or a type of financial compensation…”

Overall, naysayers suggested that travel is irresponsible and that no-charge COVID-19 insurance coverage represents some kind of bribe.

Standing up for COVID Insurance

Like any other travel/medical insurance, COVID-19 insurance is a responsible way for people who choose to travel to be protected against unforeseen expenses. 

COVID insurance doesn’t give travellers money.  It just gives them confidence to book. It means they will be covered for treatment that helps them and protects others from potential spread.

Plus, none of the three companies is offering coverage for US travel, where the spread of the virus is so much higher than in Canada.

For destinations with about the same level of risk as Canada, travel while taking COVID health and safety precautions – which all of these travel companies emphasize - is about the same as travel at home, which has widespread approval.

The K.I.S.S. Principle

But possibly the best way to shut down naysayers is pointing out the simple truth about large, publicly traded companies and especially insurance companies.

To keep it simple: they are not in the business of losing money. 

Bean counters in these companies have run all the numbers, and determined the risk was low enough to be viable to insure.

The very fact that insurance companies are willing to underwrite COVID-19 policies indicates the risk of travellers contracting COVID-19 under the conditions laid out in these new policies is very low. 

Next Steps and a New Gold Standard?

Now that it’s begun, COVID insurance seems likely to become a more standard inclusion offered by travel companies who assume the costs for their guests to be insured and have the confidence to book travel.

In addition, we’ll see COVID insurance included in the types of standard travel/medical insurance policies responsible travelling Canadians have always been encouraged to purchase for themselves.

UPDATE: The tidal wave continues! Just prior to OpenJaw press time, Manulife announced its ‘COVID-19 Pandemic Travel Plan’ launching in October.  It adds COVID coverage to its standard emergency travel medical policy, with specific additional coverage for COVID-19 medical care and out-of-country quarantine expenses.  It will be available for Canadian travellers to purchase prior to travelling within our borders as well as internationally, including to destinations with a Level 3 Travel Advisory.

When a vaccine becomes available, future insurance coverage - or even entry visas - may require proof of immunization.

Until then, while we continue to adapt to a world with the virus in it, programs that offer Canadians who want to travel a responsible and safe way to do so represent a lifeline for those travellers and this industry.

References:

*https://www.citynews1130.com/2020/08/31/air-canada...

** http://angusreid.org/covid-compliance/

***  https://www.cbc.ca/news/canada/british-columbia/co...

****https://www.theglobeandmail.com/politics/article-p...

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