Updated 30/01/20

Travel insurance may not cover losses caused by the outbreak of the deadly coronavirus, with would-be tourists warned to check their policies.

Analysis by consumer comparison site Canstar found many travel insurance policies include exemptions for disease epidemics and pandemics.

Those exemptions mean many Australian tourists could be left out of pocket by the spread of the virus.

The best remedy is for travellers to read the fine print and ask questions before committing to a policy, according to Canstar editor-at-large Effie Zahos.

“Whether or not you’re covered can come down to when you took out your policy and whether you travelled before or after a travel warning was issued,” Ms Zahos said.

“Always be sure to look up your destination on Smartraveller and make sure you are aware of any risks or safety advice.”

How the policies stack up

Canstar’s analysis found that travel insurance policies differed greatly between providers.

Policies from Cover-More, which provides policies for NRMA, SCIO and SGIC, will cover medical costs associated with coronavirus, but the company cautioned “there may not be cover for travellers’ cancellation or amendment of travel plans” or other expenses.

Similarly, AAMI and Southern Cross Travel Insurance policies said they won’t cover any claims, costs, losses or damage associated with infectious disease outbreaks, pandemics or epidemics.

CGU and HBF policies do cover those claims and losses, but only in cases where the policy was taken out before a travel warning being issued.

The Australian government issued a ‘do not travel’ warning for the entirety of China’s Hubei province – where the coronavirus originated – on January 24.

Government is urging Australians not to visit Hubei province (in red). Photo: Smartraveller

Travel insurance policies from Budget Direct did not specifically mention any exclusions for epidemic, pandemics, or other infectious disease outbreaks.

Those policies also specify that the insurer will cover the cost of travel cancellation caused by travel warnings put in place because of epidemics.

Nevertheless, Ms Zahos cautioned that “a lot of insurance policies are void” when a travel warning is issued.

“It’s important to monitor destination warnings prior to travel,” she said.

Travellers in trouble left in financial turmoil

In the 2018-19 financial year, the Department of Foreign Affairs and Trade (DFAT) provided consular assistance to 13,715 Australians who found themselves in trouble abroad.

Those cases included the “safe repatriation of eight unaccompanied children from internally displaced persons camps in Syria, and the safe release of an Australian citizen from detention in North Korea”, DFAT’s annual report said.

But DFAT also handled thousands more cases relating to medical evacuations, imprisonment and even deaths abroad.

Many of these services come with expensive price tags however, and it’s often up to the citizens involved – not government – to settle those bills.

Medical evacuations from the US typically cost anywhere between $75,000 and $95,000, according to Insurance Council of Australia’s understanding insurance initiative.

And if travellers aren’t properly insured to cover themselves in such an event, the price can stack up very quickly.

• Read more: Finding the right travel insurance for your needs

“When you’re travelling overseas, the Australian government advises that travel insurance is as important as a passport, regardless of your destination,” Understanding Insurance said.

“Travel insurance should be a priority in all travel arrangements, whether you travel regularly, occasionally or you are setting off on a once-in-a-lifetime trip.

“Some holidays, such as ski trips or voyages on cruise ships, may require special policies.”

A previous version of this story said Cover-More associated policies would not cover any expenses related to coronavirus. It has been updated to reflect the company’s policy on medical expenses.