Travel insurance in 2021 and why Jeff Bezos can’t get cover for his space odyssey
While many Australians have had to cancel school holiday plans due to growing community transmission of COVID-19, Amazon CEO Jeff Bezos is preparing to rocket off on a quick trip to space.
The billionaire is planning an 11-minute journey beyond Earth’s atmosphere with a few other brave (and extremely wealthy) space tourists on his company’s six-seater rocket. You can hear more about the Blue Origin expedition on the latest episode of Mozo’s podcast, The Finance Burrito.
But let’s talk about insurance first.
Basically, the billionaire and his buddies can’t get travel or life insurance that’ll cover the journey for a range of reasons. Firstly, there are the obvious risks involved in space travel, as well as the impact it can have on cardiovascular and bone health without a catastrophic event occurring.
Then you need to remember commercial space travel is technically a new frontier (there have been trips run through space agencies but not independent companies like Bezos’ Blue Origin or Elon Musk’s Space X), so it’s like the wild west in terms of regulation.
Insurance companies need known factors to assess risks and determine policy price-tags and exclusions. Without this kind of concrete evidence you’d be hard-pressed to find a provider willing to cover a jaunt through the stars, let alone one with an affordable premium.
All this got us thinking about travel insurance down here on the ground, and what the recent outbreaks of COVID in Australia mean for anyone with holiday plans in the short or long term.
Does travel insurance cover COVID-19?
As is the case for almost every insurance question, the answer to this differs depending on your insurance provider, your policy and personal circumstances.
However, the general rule is that if you took out travel insurance after COVID became a ‘known event’ your policy won’t cover medical or cancellation expenses related to contracting the virus, or changes to travel plans that resulted from quarantine measures. This is because insurance policies exist to protect you against the unknown, so it’s generally too late to purchase a policy once an event like a pandemic is ‘known’.
While Australia’s international travel ban was issued by the Department of Foreign Affairs and Trade on 23 March 2020, many insurance companies will list COVID-19 as a ‘known event' from around mid-January last year when events overseas were being reported on. However, if your travel insurance claim was denied because of this classification, it could be worth disputing as this is generally seen as a grey legal area.
If you took out the policy before this time you may be covered, so long as it didn’t exclude events related to pandemics or epidemics.
Additionally, some insurance companies like Medibank are now offering COVID-19 travel insurance domestically and in specific countries like New Zealand. But since travel and social restrictions are evolving, it would be wise to stay in touch with your provider and continuously examine what state lockdowns, quarantine rules and border closures could mean for your cover.
Should I get domestic travel insurance?
While there are insurance companies offering COVID-19 travel insurance in Australia, not every provider will cover you for events related to the pandemic.
It may still be worth considering domestic travel insurance if you’re travelling locally and doing things like renting a car, as hire car insurance can be complicated and come with high claim costs. And in general, if you’re carrying costly equipment or spending a lot of money on the trip, it may also be worth investigating insurance options.
If you are taking out domestic travel insurance, be sure to read your product disclosure statement (PDS) carefully for information around COVID claims and all other relevant details.