House panel demands explanations from travel insurance firms not covering coronavirus cancellations

A House Oversight subcommittee on Wednesday demanded that travel insurance providers explain why they are not fully covering trip cancellations due to the coronavirus pandemic.

People all over the world have been canceling travel plans — often at the urging of government agencies — as the coronavirus spreads, but travel insurance plans are not necessarily covering costs related to changing or calling off itineraries.

Rep. Raja Krishnamoorthi (D-Ill.), the chairman of the House Oversight subcommittee on Economic and Consumer Policy, asked that three travel insurance companies — General Global Assistance, Travel Guard Group and Allianz Global Assistance USA — provide a list of trip cancellation and medical expense claims related to the coronavirus, as well as monthly sales figures on the last five years by March 25.

Krishnamoorthi expressed concern that some consumers may still proceed with their travel plans if they’re not able to get any sort of reimbursement, therefore increasing the risk they could contract the coronavirus or expose it to others.

“The Subcommittee is concerned that your policy to deny reimbursement to consumers who choose to refrain from travel to protect themselves, their families, and their communities may worsen the coronavirus pandemic,” he wrote in letters to the companies’ chief executives. “Some of these consumers, rather than lose the entire price of their trip, may travel against the advice of [the Centers for Disease Control and Prevention] and increase the risk of infection.”

Krishnamoorthi also asked that the executives respond to requests for transcribed interviews by Monday, but noted that the interviews could be done remotely in adherence with public health officials’ guidelines to limit travel and in-person group interactions.

He had previously asked the companies to testify at a hearing earlier this month, but all of them declined to participate. 

Travel Guard, for instance, states on its website that “fear of travel” is generally not a covered event under most of its policies. Instead, consumers may be eligible for an insurance premium refund or a travel insurance voucher.

Premium refunds would be available to people who requested a refund within 15 days of purchasing a policy, haven’t started their trips and haven’t filed claims. 

“Trip cancellation for concern or fear of travel associated with sickness, epidemic or pandemic, including Coronavirus, is not covered,” it states.

However, Travel Guard does say that people who contract the coronavirus before departing for their trips or while they are traveling would be covered for trip cancellation or medical expenses if the diagnosis is confirmed with a doctor’s note.

Nations across the globe have imposed travel restrictions to help slow the coronavirus outbreak, leading to hundreds of flight cancellations.

The Trump administration in recent days imposed a 30-day suspension of travel of non-citizens from Europe and the United Kingdom. The European Union has also established a 30-day ban on nonessential travel to member countries.