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The New Rules for Travel Insurance During the Summer of Coronavirus

Planning a summer vacation is more complicated than usual this year, thanks to the coronavirus. Unfortunately, one of the ways to relieve vacation-related anxiety — buying travel insurance — has also become more complicated as skittish insurers pull back from the market.

Ready for the good news? It’s still easy to get insurance that protects your trip, including some that comes for free through one of the credit cards in your wallet. Also, spurred by consumer uncertainty, cancellation policies have been relaxed, reducing the potential need to insure your trip at all. Most notably, the major airlines are waiving change fees on tickets bought before June 30.

Here’s what you need to know about protecting the cost of your summer trip, by making the most of insurance, cancellation policies, and more.

Insurance still covers you if you catch the virus

Technically, under many travel-insurance policies, falling victim to a pandemic qualifies as a “foreseeable event,” with its consequences not covered under the policies. However, most of our best travel insurance companies are waiving that technicality. If you get sick with the coronavirus, then, you’re generally still covered under standard policies. And that holds if you catch the virus before departure or during the trip, provided you purchased the necessary coverage.

There are, however, exceptions and nuances in the companies’ respective coronavirus policies, so it pays to read the details or contact them before you buy a policy. For example, Generali departs from most of the others by saying that “[t]ypical cancellation/trip interruption coverage is not available for foreseeable events" like coronavirus, and therefore there is “no coverage for COVID-19 related losses…”

And not all policies are clear on coverage should you remain uninfected but quarantine is required due to the pandemic. Travelex, though, explicitly adds that “travelers who...are physically quarantined while coverage is in effect qualify for trip cancellation/interruption benefits.”

Your credit card may provide free insurance

If you’re all but unaware of the free travel insurance that comes with some credit cards, now is the time to research whether cards you own have this feature. Coverage with the best cards compares well to what you get from a standard purchased policy, and might be all you need for your 2020 vacation. And the price is right, since buying standard travel insurance typically costs between 5% to 10% of the total cost of a trip, according to TravelInsurance.com. Nearly two-thirds of consumer credit cards offer travel-accident insurance, according to a 2019 Wallethub survey , which also found that about one in five provide cancellation insurance. While even cards with modest fees may carry coverage, the best provisions tend to come with premium travel cards. The Chase Sapphire Reserve, our top credit card for travel rewards, offers up to $20,000 in cancellation and interruption insurance for the cardholder and their immediate family members. Bank of America Premium Rewards card offers $5,000 in cancellation and may also cover emergency evacuation and transportation.

For the most part, though, you can expect the same limitations to credit card coverage as for a standard policy you pay for. So, as with insurance you buy, you won’t be covered if you cancel due to anxiety over the pandemic coronavirus, and even medical coverage may be limited if the card issuer defines your infection with coronavirus as a “foreseeable event.” R ead the card’s coverage requirements closely; for example, Chase requires you to inform them within 48 hours of a doctor recommending that you don’t travel for reason of sickness in order to honor a claim. Your credit card may not cover everything that's included in a policy you buy, so you might want to compare the two options. And don’t expect the coverage to remove the hassle from making a claim. The language for many cards says the card issuer will step in only if you have already reached out to the vendor and have been unable to reach agreement on a refund or other accommodation.

Canceling for any reason requires an add-on

Standard travel coverage, whether with a purchased policy or through a credit card, won't cover cancellation of your trip for any reason. Relevant to this summer, you'll be out of luck if you cancel a trip for mere fear of catching coronavirus at your destination or on the way there. Coverage may not apply even if governments issue travel advisories or alerts for where you are headed.

For these and any other perils, you'll need a so-called Cancel for Any Reason (CFAR) policy. Not available through credit-card coverage, these add-ons to a standard policy allow you to cancel your trip under almost any circumstance, provided that you meet some qualifying criteria.

"A CFAR (Cancel for Any Reason) policy is the best route for travelers who may wish to cancel prior to departure," whatever the motivation, according to Erika Richter, Senior Director of Communications with the American Society of Travel Advisors.

Not all insurers are still offering CPAR policies, but most insurers on our recommended list still are. You need, however, to purchase the add-on within a certain time frame after making your first payment for the trip — it can be anywhere from 24 hours to 21 days, and you need to insure the entire cost of your trip. And you’re not reimbursed for the entire insured cost; instead, you’ll get back either 50% or 75%, depending on what you select.

The add-on is costly. As a rule, according to TravelInsurance.com , CFAR coverage adds a premium of approximately 40% to the cost of standard travel insurance (typically 5% to 10% of the trip's cost, as noted above). If, for example, if you paid $4,000 for a trip and the standard policy premium was $400, you could pay an additional $160 for CFAR coverage. A total of $560 or so adds up to almost 15% of the trip’s value to insure against the worst.

Not all companies are still offering CFAR policies, but many still are. As an example of the provisions of these plans, here are four companies handled by TravelInsurance.com. Listed alphabetically, the insurers are listed with the deadline after initial trip payment within which you must buy the coverage, along with the maximum percentage of the trip’s pre-paid and non-refundable costs the policy will reimburse. AXA Assistance USA (Platinum Plan) 14 days after trip payment. 75% of trip costs.

John Hancock Insurance Agency. 14 days after trip payment. 75% of trip costs.

AIG Travel Guard (Gold and Platinum Plans only) - 15 days after trip payment. 50% of trip costs.

Travel Insured International (Worldwide Trip Protector Plus Plan) 21 days after trip payment. 75% of trip costs.

Some Cancellation Policies Have Been Relaxed

You might get a pleasant surprise when booking an airline ticket or a favorite Airbnb house this summer. The rules for canceling after you book may be less stringent than in the past, although you may need to move quickly to enjoy some of them. Almost all airlines — including American, Delta, JetBlue, and United —are offering changes without fees to flights booked before June 30. To qualify, some carriers, including Delta and American, require you to book a new flight when you cancel the old one, which means you must know the future date you wish to travel. Others, including United and JetBlue, are offering vouchers good for two years, which allows greater flexibility.

However, airlines are not offering outright refunds on new flight bookings, which concerns William McGee, Travel Adviser with Consumer Reports. While he praises carriers for their flexibility with change fees, he says "Consumer Reports believes that until the national emergency is truly over, all flights affected by COVID-19 should be refundable if a passenger needs to cancel due to concerns about health, canceled events, or government warnings and lockdowns."

When it comes to lodging, most hotels have long had flexible policies that allow stays to be canceled. Policies for private home rentals vary in their stringency, but this summer the major booking platforms are encouraging hosts to be more lenient about cancellation due to the anxieties and uncertainties of the pandemic.

And with some success, according to Airbnb. About 60% of its U.S. listings now have cancellation policies that are more flexible, and that allow guests to bail at a later date than is often the case, according to Liz DeBold Fusco, an Airbnb spokesperson. But since policies still vary by the property, she urges would-be guests to reach out to hosts to ask about cancellation and other policies, including those for cleaning. (The company itself recently issued an enhanced cleaning protocol for hosts to follow during the coronavirus epidemic.)

Similarly, hosts set the cancellation policy for properties listed on VRBO, another major booking platform. But the company's COVID-19 Emergency Policy asks "property owners and managers to offer a full credit for the amount [guests] already paid" if they choose to cancel after the date specified by the cancellation policy. That value could be used for a booking next year, for example. If that doesn't work, VRBO is "strongly encouraging property owners and managers to issue at least a partial refund for situations in which a flexible credit cannot be accommodated."

More from Money:

12 Glorious Low-Risk, Low-Cost Things to Do This Summer

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