Travel insurance and COVID: Expert answers to your questions

Posted: 22 November 2021 11:54 am
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Southern Cross Travel Insurance CEO Jo McCauley answers some commonly asked questions, including when you can and can't be covered for COVID.

International travel is back with flights to Singapore resuming over the weekend. Demand is only expected to grow as states open up and visitors no longer need to quarantine.

But there's still some uncertainty surrounding overseas travel and COVID. Many countries have made travel insurance compulsory and require you to pay for a PCR test.

We spoke to Southern Cross Travel Insurance CEO Jo McCauley to get answers to some of the most frequently asked questions about travel insurance, including when it can and can't cover COVID-19.

Can I get travel insurance with COVID cover if I go to a "Do Not Travel" country?

Due to the high risks associated with pandemics, most travel insurance providers typically list pandemics as a general exclusion in their policy. Insurance providers are highly unlikely to pay out on any claims that are related to a general exclusion, even if a country is considered safe to travel to.

A similar approach is taken to countries with a "Do Not Travel" advisory.

Travel advisories are used by the Department of Foreign Affairs and Trade (DFAT) to provide Australians with information about the risk of travelling to certain destinations or regions. These are available on the Smartraveller website which hosts DFAT travel advisories for all countries around the world.

If you choose to travel to a destination or a region that has a level 3 or 4 travel advisory in place before you travel to the area, your insurance policy is unlikely to cover you for any event that is related to the reason why that advisory was put in effect.

Some insurers, including SCTI, have extended their cover to include a level of COVID-19 cover (despite the pandemic general exclusion).

However, that extended cover will generally only apply when you are travelling to a destination with a Smartraveller travel advisory of "Exercise normal safety precautions" (level 1) or "Exercise a high degree of caution" (level 2) in relation to COVID-19.

Therefore, before you book your holiday, it's essential you check your destination on Smartraveller.

Can travel insurance cover COVID?

While some insurance providers are offering a level of COVID-19 cover to customers who buy their policies, we recommend that you carefully read all of the terms and conditions of the cover so you're fully aware of what you will and won't be covered for.

Conditions may include full compliance with entry requirements for destinations and carriers such as evidence of vaccination or pre-departure tests, or for the place you're visiting to be considered a safe travel destination.

Insurance cover for medical expenses arising as a result of being diagnosed with COVID-19 is, in some countries, now a mandatory requirement for entry.

For our international (TravelCare) products, the policyholder is covered for costs related to any medical treatment required should they test positive for COVID-19 (subject to the terms and conditions detailed in our Supplementary Product Disclosure Statements).

We always try to remind our customers that COVID-19 cover aims to provide a level of protection, but it won't cover everything. This is because of the unpredictable travel environment and uncertainties associated with COVID-19.

What COVID-related expenses can travel insurance cover?

When it comes to COVID-19 cover, we strongly encourage our customers to carefully read their policy to really understand the benefits available to them, and the circumstances in which they could realistically make a claim.

SCTI includes cover for the following:

  • Medical expenses if you are diagnosed with COVID-19 while on your journey (International [TravelCare] products only).
  • Costs ($2,500 up to Unlimited) to change your travel arrangements if you or a relevant person are diagnosed with COVID-19 before you leave and your journey is cancelled or amended.
  • Costs (up to $5,000) to change your travel arrangements if you or a relevant person are diagnosed with COVID-19 after you leave and your journey is interrupted or cut short.

What COVID-related expenses will travel insurance not cover?

The important thing to remember is that "pandemics" typically remain a general exclusion in many travel insurance policies so the only benefits for which you can claim are likely to be those listed in the insurer's COVID-19 cover. That is why it's so important to read the policy wording carefully.

We won't cover COVID-19 losses or expenses in the following situations:

  • If you or a relevant person are not fully vaccinated.
  • If a claim is connected to a government restriction due to COVID-19.
  • Where boarding of transport is denied because of a failure to get the documents necessary for the journey, such as a COVID-19 vaccination history or a negative COVID-19 test.
  • Getting COVID-19 while travelling to a destination or a region which has a level 3 or 4 travel advisory in place for COVID-19 on the Smartraveller website.

There are other exclusions, so we encourage you to read your policy wording and supplementary product disclosure statement carefully.

Does travel insurance cover pre-departure PCR tests?

A PCR test detects whether a person has COVID-19. Depending on where you're travelling to or from, you may need to take a PCR test and return a negative diagnosis of COVID-19 before the date you're due to travel.

The costs associated with PCR testing to comply with your travel requirements are typically at the expense of the traveller, and SCTI does not cover this cost.

In other markets, we have seen overseas insurers partnering up to offer discounted PCR tests to its customers. However, it's still such early days for international travel in Australia that we haven't seen this yet, but we may start to see this happening locally as we move into next year.

Will my travel insurance premium differ depending on what time of year I travel?

We don't operate seasonal pricing. Your travel insurance premiums will remain the same regardless of when in the year you travel.

When should I take out travel insurance?

What we've seen following the global pandemic is increased consumer awareness for the need for travel insurance, and as a result it is no longer being viewed as a "last-minute" add-on but a travel necessity that is integral to the travel planning process.

We always recommend that people take out travel insurance as soon as they have booked their holiday because then you may be covered for events that lead to cancellation costs before you even start your journey.

How has cover changed pre-pandemic vs post-pandemic?

Overall, the COVID-19 pandemic has forced the industry to evaluate its products and services to ensure they're continuing to meet customer expectations, especially in this new environment where peace of mind is paramount.

Prior to COVID-19 many travel insurance policies didn't cover pandemic related incidents. However, now there is a customer expectation that a travel insurance policy should have some level of COVID-19 cover.

Different countries will also have different travel requirements, so it's really important that travellers familiarise themselves with their destination's travel requirements.

As a result of the more complex travel environment, our travel habits may change and we may see fewer multi-stop journeys due to the varying requirements of different destinations.

Since the pandemic, there is a stronger desire from our customers for greater transparency. The pandemic has shone a spotlight on the fact that many Aussies were not clear on what their travel insurance policy covered them for.

However, since the pandemic, the industry has witnessed a considerable shift in consumer understanding and, as a result, the Australian consumer is now much more informed about what is and isn't included in their travel insurance policy.

To make it easy for our customers, we've gone through a process of "plain Englishing" our domestic and international (TravelCare) policies, to make them easier to understand and to ensure our customers are clear on what they're covered for before purchasing a policy with us. We've also launched a digital assistant on our website to help customers find the information they need quickly and easily.

How much more can customers expect to pay for a policy post-pandemic?

Most insurance providers will review their premiums on a regular basis and adjust according to risk.

Given the unpredictable travel environment and increased risks of medical treatment due to COVID-19, travel insurance companies are taking on a significantly increased risk, so it is likely premiums will rise across the industry.

Are there any "cheap and cheerful" plans to cover domestic or short trips to safe countries like New Zealand?

Australians travelling locally can buy a domestic travel insurance policy which includes some cover for COVID-19 in the event of cancellation or changes to their journey. As SCTI's domestic policy is only available to customers who live in Australia permanently and are eligible for a Medicare card, there is no cover for medical expenses.

SCTI does offer competitive premiums for its short haul trips to destinations such as New Zealand, but it doesn't offer specific plans for "safer" destinations and, at this stage, it's too early to say whether this will change.

Why is it so hard to get cruise cover at the moment?

This is because the COVID-19 risks associated with cruising are fairly high. The environment in a cruise ship often includes confined spaces and areas where people congregate, which provides multiple opportunities for the virus to spread.

There are also limited medical facilities on board, and evacuation costs are often high because the patient is situated out at sea.


Finder looked at over 30 travel insurance policies and found 3 partner brands offering COVID-related cover, including Southern Cross Travel Insurance. You can find them here.

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