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Trans-Tasman Bubble Travel Insurance: What’s Covered and What’s Not?

Considerations for crossing the ditch

The trans-Tasman bubble has commenced, and there are many Kiwis and Aussies who are ecstatic to see their friends and family after a long year of separation. Travel between our two closely-linked nations will pick up quickly. Family reunions aside, both sides have been starved for travel and tourism opportunities. Business trips can recommence, adventures can be had, and the world is returning slowly to normal despite the fact that COVID-19 still looms.

This quarantine-free “bubble” is a unique situation. It brings with it the

possibility of a sudden border shutdown which will leave travellers either stranded or faced with a 14-day quarantine when returning home. The travel insurance industry has had to respond to this unprecedented new scenario, creating policies specifically for travel during the bubble period.

So if you’re planning to head across the ditch, here’s what you need to know before you go.

ICNZ speaks out

A media release by the Insurance Council of New Zealand (ICNZ) covered the sector’s response to the bubble in broad terms. Chief Executive Tim Grafton said this:

“Insurers have constantly looked at ways to support their customers for the day the travel bubble becomes a possibility, introducing tailored policies that provide cover for a range of COVID-19 related claims… However, as discussed over the last few days, border closures imposed by a government are not covered by any insurer as it is simply not possible to develop a product that accounts for the uncertainty and the level of risk this presents.”

Scenarios not covered

The release explained in more detail what would not be covered in policies for travel policies, and what would. They will not cover losses resulting from:

● Travel cancellations caused by government-imposed lockdowns.

● Costs incurred should a government impose a blanket quarantine.

● Travel delay caused by COVID-19.

● Border closures due to COVID-19.

● Travel to any country where a “do not travel” alert remains in place.

With border closures such an ever-present, well-known, and likely possibility, it’s understandable that insurers cannot cover for travel disruptions caused by changes to the “bubble” allowances. In this regard, travellers must make measured decisions and plan for any possibility.

COVID coverage

There are, however, some COVID-19-related disruptions that are often covered by travel insurance. This will vary between policies and insurance providers, but yours MAY cover any delays relating to you or one of your close family members becoming sick with COVID, including cancellation costs, quarantine costs, and flights to return home if necessary. If you are an essential worker and leave is revoked due to COVID-19, you may be covered. Other situations that your travel insurance policies may cover include an unexpected positive test at the airport preventing you from travelling, and cancellation due to you (or a travel partner) being classified as a close contact.

Don’t travel uninsured!

Although COVID is at the forefront of most travellers’ minds, it is far from the only risk you take when you leave home for a trip—whether that’s to Australia or in Aotearoa. Travellers face the same possibilities as they did 18 months ago in addition to those posed by a pandemic. Travel insurance remains a necessity for anyone who wishes to avoid being left with big bills or stuck somewhere unable to get home (for reasons other than border closures).

Tim Grafton commented in the ICNZ media release:

“Travel insurance is still available to purchase and offers cover for a variety of unforeseen events as outlined in individual policies – such as a broken leg, theft or lost baggage or the impacts of a significant weather event.”

While these are broad statements covering the majority of insurance providers in New Zealand, each policy will be different. If you are planning to travel in the near future, the best advice is this: carefully read your travel policy—and discuss it with your broker—to find out exactly what you will and will not be covered for. Carefully consider the possibility of border closures, how they may disrupt your plans, and how you would handle that eventuality without insurance cover.

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