The global Ebola outbreak has had a far reaching domino effect on the world economy and the travel insurance industry is no exception. Questions surrounding travel policies are generally falling into two categories: (1) What happens if a traveler must cancel or interrupt their trip due to the threat of Ebola? (2) What coverage does the traveler have if they contract Ebola?
The answer to question one actually depends on the insurance company and the plan the traveler has selected. Trip cancellation interruption coverage falls into the “named peril” category, whereby only those perils specifically listed by the insurance company, and not limited by the company’s exclusions, are covered. Translation—there is no coverage if a traveler cancels due to the threat of Ebola, because at present the virus is not listed in any available policies. If, however, one is forced to undergo quarantine, most policies include that as a peril and would therefore cover the traveler.
But even here, the consumer must take note. Many travel plans include the exclusion of quarantine if it’s due to an epidemic or pandemic.
The answer to number two is much more precise. If one contracts Ebola, that is, of course, considered a sickness, thereby possibly making the client eligible for benefits under the medical expense, trip cancellation, trip interruption, travel delay or emergency evacuation coverage found in most policies. However, this, too, changes when plans do not provide coverage once an outbreak falls into the “epidemic” category.
Changes are emerging, however, as it witnessed by the recent Nationwide Insurance announcement in which the company has added a new peril to its Prime Plan. This company will honor cancellations or interruptions when the Centers for Disease Control issues travel warnings, advising travelers to avoid certain destination countries or regions for that period that covers one’s planned trip provided their itinerary includes the travel to the warning area. While this may seem somewhat of a small step, it’s certainly one in the right direction. Those concerned about Ebola would be well advised to select a plan offering “cancel for any reason” coverage, thereby enabling travelers to control their destiny, rather than relying on the CDC to publish travel warnings.
The “cancel for any reason” coverage is time-sensitive; usually available if purchased within 21 days of the first trip payment date and requiring the traveler to insure their trip to value.
Given the current threat of Ebola, most insurance companies are now trying to decide whether to include this coverage. Some companies might respond by adding coverage while others might respond by eliminating coverage for travel to and from areas being impacted by this disease.
To say the least, underwriters find themselves trying to delicately balance the public’s need vs. the possibility of a single event (such as Ebola) causing catastrophic losses. In some ways, the old adage “the more things change, the more they stay the same” has once again proven true. The threat of Ebola somewhat mirrors the AIDS/HIV outbreak of the 1980’s when travelers faced similar global trepidations.