The year 2020 was one of unprecedented circumstances in every aspect of life around the globe, and one that forced each industry to adapt. As we continue to move forward in the COVID-19 world, as restrictions and border closures are eased and then reinforced, the importance and role of travel insurance is ever-evolving. After a massive decline in growth in 2020, the travel insurance market is adapting to the requirements of consumers in the current COVID-19 climate. Travel insurance providers are leaning towards a previously unheard of level of transparency in regards to what their policies cover, as well as providing extra flexibility and extra cover against cancellations. As we move forward in 2021 and indeed as the world tries to recover from COVID-19 and international travel picks up again in 2022 and onwards, the travel insurance market will likely continue to adapt and provide peace of mind for consumers against COVID-19 related claims and cancellations. 


COVID-19 coverage

Prior to the COVID-19 pandemic, largely insurance policies did not provide cover against a pandemic or related travel restrictions and cancellations. It’s important to note that insurance policies can’t and don’t cover against every eventuality or potential loss. However, it’s true that travel insurance policies prior to the COVID-19 outbreak were not equipped for a global pandemic. Cancel For Any Reason (CFAR) cover has seen a huge increase since the beginning of the pandemic, and will likely continue to grow. It is a more costly addition, but consumers and travellers are increasingly looking for the peace of mind such a policy offers. CFAR insurance will reimburse you for a stipulated percentage (such as 75%) of prepaid, non-refundable trips – regardless of why you are cancelling. As travel slowly picks up, so will travel insurance. 

Ensure your policy has the cover you need

It is important to scrutinise each travel insurance policy to understand what is covered. Many travel insurance policies won’t cover COVID-19 related medical expenses, or they may cover medical expenses but not cover for cancellations if the insured party contracts COVID-19. Until COVID-19 is properly left behind us, it is important to ensure you are covered against any related travel losses or cancellations as a result of the pandemic. 


Cover flexibility and cancellations

Cover flexibility is now more important than ever before, in the current uncertain travel market. Many insurance providers will now accommodate travel date changes, in case the trip needs to be rescheduled. In this case, the traveller can postpone the trip and insurance policy without needing to cancel and re-book. Where the option for cancellations was a popular aspect of many travel insurance policies pre-COVID, the rate of cancellation coverage has gone up to 95% of travel insurance policies since COVID-19. 

Bundling insurance 

With the need for flexibility and peace of mind around insurance, many providers are now bundling travel insurance with other policies to ensure each traveller has the cover they need. For example, some leisure travel insurance policies bundled with medical insurance will cover health care access, at-home COVID-19 testing and wellness programs. 


Insurance providers are becoming more transparent in terms of their inclusions. When COVID-19 first hit, many travellers weren’t sure exactly what their travel insurance, if anything, would cover them against. Prior to COVID-19, insurance providers were sometimes known for tiptoeing around their exclusions. But the pandemic has at least had the positive impact of leading to more transparency from insurance providers around their inclusions and exclusions. If a policy or provider does not protect against COVID-19 related claims, they will make this known. It is impossible for an insurance policy to protect against every possible outcome – and indeed insurance companies would not have survived the first wave of the pandemic if they did. Insurance policies are becoming increasingly transparent, so that the travellers know prior to purchasing exactly what it will cover them for. Many insurance providers are also working on streamlining the claiming process to make it easier for both parties, and to ensure a backlog of claims is avoided. 

Selecting the right cover for you

The COVID-19 pandemic, and all those that lost out on their travel plans and finances as a result of having to cancel or reschedule travel without the support of appropriate travel insurance, will likely serve as a reminder for a long time about the importance of a sound travel insurance policy. It’s going to be a long road to recovery for the travel industry, and indeed until we can safely travel internationally on any sort of regular basis. As we all try to adapt to this new COVID-19 climate, and begin to travel again, it’s vital to ensure you are protected against any related losses and cancellations to your travel plans. As we’ve seen in recent months with sudden border closures and lockdowns, travel plans can change in the blink of an eye – and this is likely to remain the case for a long while yet. Speak to GSK Insurance Brokers to determine which is the best travel insurance policy for you – and consider bundling insurance policies for the best protection and peace of mind. 

April 22, 2021

By Graham Knight

Founder and Managing Director of GSK Insurance (established in 1981). Graham draws upon more than 50 years’ experience in the insurance industry, working in both insurance and broking across various private, public and government sectors in Australia.

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