Coronavirus catch for travellers

Payouts not guaranteed if you decide against making overseas trip.

Last year we booked a tour to China for this April. We then took out a travel insurance policy as protection against unforeseen cancellation and, of course, the important things you should always cover travelling overseas.

Several months later, coronavirus reared its ugly head. 

At first we thought we’d wait and see how it panned out. Then the virus started to spread rapidly, infections multiplied and, sadly, quite a few people (mostly in China) started dying. 

When the official Federal Government travel warning was lifted to ‘reconsider your need to travel’, the second highest level (three), which states there are “serious and potentially life-threatening risks”, we decided to ask if the trip would be cancelled and what our options were.

This was when we entered the ‘Bermuda Triangle’ of prepaid tours versus travel insurers. 

The travel agency said at that stage (about three or so months out) our April trip would be going ahead. 

They referred us to our travel insurer to consider our options.

The travel insurer suggested any cancellation while the Government travel advice was not at the highest level (‘do not travel’) would be considered a ‘change of mind’, with no payout.

Then the Government lifted its travel advice to ‘do not travel’. 




The travel agency said airlines were reducing flights and tour operators in China were cancelling all tours until the end of March, but not beyond that at this stage.

About two months out, while the travel insurance company would not provide a definitive answer, it suggested that even though the government warning was ‘do not travel’, it may be too far in advance of the booked tour to cancel without the risk of it still being considered ‘a change of mind’ (i.e. no payout). 

So, it seems that the travel agency and tour operators are waiting for the virus infections to diminish enough for the Government to lower the ‘do not travel’ warning, in which case tours could resume. So, the travel agency and operators wouldn’t lose out.

Meanwhile, the travel insurer seems to be working on the basis that either the tour will go ahead or it will be cancelled by the tour operators and a credit for future travel provided. In either case, they won’t have to pay out.

Welcome to ‘no man’s land’.


Travel insurance is very important. I wouldn’t travel overseas without it. But here are some things you need to be aware of:

Generally, travel insurance policies are ‘null and void’ if, for some reason, you choose to travel to a destination for which there is an official ‘Do Not Travel’ warning in place. This makes sense. This is the case even if you purchased your policy when there was no travel warning in place. Some may even be void at the Level 3 warning, ‘reconsider your need to travel’.

Even with something as serious as coronavirus popping up at a destination to which you are booked to travel after you buy your travel insurance policy, if the tour company decides to go ahead with the tour, you are unlikely to be able to cancel and claim on insurance if the official travel warning is anything lower than ‘do not travel’.

Travel insurers generally will not give you a definitive answer if you seek advice before claiming. The only thing you can do is cancel your tour, losing your money at the booking end, then lodge an official claim and hope that it’s successful.

Story by Jim Mathers