Manulife Financial Corp. is preparing to launch a travel insurance product that covers emergency medical costs and trip interruption expenses resulting from the global coronavirus pandemic.
Business and leisure travel remains sluggish more than six months into the pandemic as COVID-19 continues to spread around the world in places including Canada, where cases are once again on the rise.
In March, when the pandemic was declared by the World Health Organization (WHO), several insurers told clients they would no longer pay claims on trips cancelled or interrupted due to the spread of the virus unless they had a premium add-on that allowed them to cancel for any reason. Manulife, Canada’s largest travel insurance provider, made this determination about a week before the pandemic was declared on March 11, telling clients the contagious and fast-spreading virus was already a “known event.”
The new pandemic policies to be sold through Manulife and its distribution network beginning in October will be available to Canadians travelling both within the country and to international destinations — including those subject to government-issued level 3 travel advisories to avoid all non-essential travel.
Manulife’s move follows an Aug. 31 announcement by Air Canada Vacations that it would be providing COVID-19 emergency medical and quarantine coverage to travellers to a list of sun destinations including Jamaica, Mexico, Cuba and Barbados in partnership with insurer Allianz Global Assistance. The cost of that insurance is covered by Air Canada Vacations, with no additional fee to travellers. WestJet will be offering a similar no-charge package to Canadians travelling to and from Europe, the United Kingdom, Mexico and the Caribbean beginning this Friday.
A spokesperson for Manulife said the Toronto-based company’s new pandemic policies will be priced individually based on the age of the client, what plan they qualify for and the duration of their trip. She declined to elaborate on pricing, such as whether travel to areas with higher infection rates will cost more, and whether a pandemic policy will cost more or less than a traditional travel policy with a cancel-for-any-reason top-up.
In a statement, the company said the policies will provide broad coverage, including emergency medical coverage with additional coverage specific to COVID-19 and conditions related to the respiratory illness. The policies will also cover travellers in the event of an unexpected quarantine due to the pandemic under the umbrella of trip interruption benefits.
“Manulife understands that some Canadians have family, business and other important reasons for travelling in-country and to global destinations,” the insurer said in the statement.
The Canadian government has advised travellers to check their insurance coverage if they do decide or need to travel amid the pandemic, and to consider buying a cancel-for-any-reason (CFAR) policy top-up, if available.
Manulife says its new policies will provide up to $200,000 per insured person for emergency medical coverage for COVID-19 and related conditions if they test positive while at their destination, and emergency air transport to return home, if needed. Coverage specific to the respiratory virus is a fraction of the $5 million limit for emergency medical expenses unrelated to COVID-19.
For coverage of quarantine expenses due to a positive test result, denied entry, or contact tracing while at a destination, Manulife’s new policy will pay out $150 a day and up to $2,100 per person for a maximum of 14 days. For families, the payout would be $300 a day and up to $4,200.
Medipac Travel Insurance, which markets to Canadian “snowbirds” who travel to warmer destinations in winter, sells policies with some emergency medical coverage related to COVID-19 but does not cover expenses related to an extended stay or alternate transportation home.
The pullback by insurance providers during the pandemic contributed to pain in the travel and tourism industry, according to those who track it, but the arrival of pandemic policies may not be enough to jumpstart travel.
“The lack of covid-19 specific travel insurance has been a significant factor in holding back travel since the pandemic started and since the media relayed many stories of Canadian travellers being stranded abroad,” said Frederic Dimanche, director of the Ted Rogers School of Hospitality and Tourism Management at Ryerson University.
However, he said border closures and a required two-week quarantine for people returning to Canada from abroad are the main reasons people aren’t travelling, along with a fear of doing so while the virus is continuing to circulate around the world.
“Confidence is not back yet, especially with the recent growth of cases, and that affects domestic travel as well,” Dimanche told the Post. “I doubt the availability of travel insurance will have a big impact on travel intentions.”
The virus that causes COVID-19 was declared a pandemic when many Canadians were on winter holidays or preparing to travel for the March Break school holiday. Since then, some disputes between insurers and clients have landed in court.
Last week, a proposed class-action lawsuit was filed against TD Insurance , with the lead plaintiff claiming the insurer improperly denied his claim for reimbursement of a cancelled trip by instead offering credits or vouchers for future travel. The proposed class action must be certified by a court before it can move forward. None of the allegations have been proven.