Travel Insurance in times of COVID-19 - view from The Netherlands
Due to Covid- 19 travel insurance companies have had to face many claims under the travel insurance policies in the past months. Many travel insurance policies exclude the outbreak of a pandemic from coverage. In a couple of cases the insured party did not give up after the Travel Insurer refused to provide cover and appealed to the Financial Services Complaints Tribunal of The Netherlands.
As the name suggests, travel insurance provides cover for travelers during a trip. On the basis of travel insurance, travelers can receive assistance if they have to cut their stay short or if they are forced to stay longer as a result of an illness or an accident. Travel insurance usually covers the additional costs in certain cases.
The Policy Conditions of the travel insurance determine which events are covered and which events are excluded from insurance. Travelers can extend coverage by purchasing specific modules.
Financial Services Complaints Tribunal of The Netherlands interpret the policies in favor of the Insurers
The Financial Services Complaints Tribunal of The Netherlands is a dispute settlement authority accessible to consumers where they can complain about, for example, their insurance.
As mentioned before a couple of consumers appealed to the authority after the Insurer refused to provide cover.
An example of such a case is decision no. 2020-628 of 29 July 2020, of the Disputes Committee of the Financial Services Complaints Tribunal of The Netherlands. In this case the Insured was visiting his daughter in Morocco when both Morocco and The Netherlands went into complete lockdown. The flight was canceled and the only way home was repatriation by the Dutch Government. He had to stay in Morocco for weeks.
The Insured called on his travel insurance for the extra costs he would have to make because he couldn’t fly home. The Insurer however refused cover, and took the position that cover only exists when damage is caused by an earthquake, flood or volcanic eruption and that definitions of earthquake, flood and volcanic eruption are given in the General Terms and Conditions. These Conditions did not mention a pandemic or a virus outbreak, such as the coronavirus outbreak, and therefore the Insurer was not obliged to reimburse the Insured.
The Disputes Committee concurred with the position of the Insurer and considered (in so far as relevant) that the starting point should be what is stated in the Insurance Conditions. The Conditions are – according to the Committee - what parties have agreed on. According to The Disputes Committee the Insurer is free to determine the limits within which it is prepared to provide cover.
In this case The Disputes Committee found that the Policy Conditions were sufficiently clear about what would and would not be covered by the Insurer.
Does that mean Travel Insurance never covers COVID-19 related issues?
No, it does not. Firstly the question whether or not the insurance provides cover depends on the Policy Conditions. However in certain circumstances the Insured will be able to successfully make a claim on his travel insurance. This is the case, for example, if the insured or a co-insured himself becomes seriously ill due to the Corona virus and as a result has to make additional accommodation costs. Serious illness is in fact classified as an insured event in most Policy Conditions. In that case it does not matter what made the Insured sick in the first place.