Coverage gaps are exposed

Pandemic reveals limitations in travel insurance

NORFOLK, Va. — For many people, travel insurance has been little more than a box that pops up on a booking site to offer some cheap peace of mind.

But the coverage's limitations have been brought into stark relief during the corona virus pandemic, leaving would-be travelers frustrated over denied claims for hundreds — if not thousands — of dollars.

Plane tickets, vacation homes and other excursions are going uncovered even though some say they couldn't have reached their destinations because of ski resorts shuttering, beaches closing and governors urging everyone to stay home.

Ed Svec, 67, said he was shocked when his insurance company rejected his claim for a $5,100 condo rental in Colorado that he booked for a late-March ski trip but had to cancel because the resort was closing.

“I was being advised by the governor that people in my age group should stay away from the area,” said Svec, who lives outside Cleveland. “But then the decision was made for us.”

Basic travel insurance policies generally don't cover pandemics or fears of getting sick. And plans often have a very specific list of covered reasons for cancellation, such as losing a job or a terrorist attack.

Although the policy language isn't new, many who purchased plans assumed that virus- related cancellations were covered. Others complain the policies are difficult to understand.

“The contract was like 10 pages of small print, and I'm not a lawyer,” said Svec, who retired as an accounts manager for a multinational company.

Last month, Illinois Congressman Raj a Krishnamoorthi raised concerns about denied claims, warning that“companies should not be profiteering off this crisis.”

Krishnamoorthi has been asking three travel insurance companies to release virusrelated claims information to the U.S. House Subcommittee on Economic and Consumer Policy, which he chairs.

“The evidence shows consumers ar e purchasing standard travel insurance products, thinking they will be covered if they cancel their trip because of coronavirus,” the congressman said in a statement last month. “Yet, companies like Allianz, Travel Guard, and Generali are refusing to cover those claims.”

Krishna moor this aid in a statement on Friday that the companies have refused to provide information, adding that“actors with nothing to hide rarely ignore these requests.”

Travel Guard and Generali did not respond to requests seeking comment about the congressman's concerns.

Allianz spokesman Daniel Durazo said in an email that its insurance plans specifically exclude“losses resulting directly or indirectly from an epidemic.”

He said the company has told the House subcommittee that it's primarily focused on helping customers during “this unusual and broadly imp acting public health crisis.”

Travel insurance is unlikely to be a major priority for lawmakers given the pandemic's widespread damage to the economy, said Michael McCloskey, an associate professor at Temple University's Fox School of Business.