Cancelling trips during Covid-19: What credit card insurance does — and does not — cover

Air travel has practically come to a halt as the Covid-19 pandemic continues to paralyze the global economy and the tourism industry alike. 

For people who have booked trips on their credit cards, questions loom as to whether they will be compensated if they cancel their travel reservations considering the evolving pandemic situation.

As a first recourse, travellers should contact the airline or travel provider directly since many of these companies have adjusted their cancellation and rebooking policies in response to the novel virus, according to the website of the Canadian Imperial Bank of Commerce (CIBC). The travel insurance offered by the bank’s credit card covers any amount that is not refunded by the carrier, up to the policy’s maximum. 

Global Affairs Canada issued a travel advisory on March 13, warning against all non-essential travel outside of Canada. Many credit cards, including those by the Royal Bank of Canada (RBC), CIBC, Bank of Nova Scotia and TD Bank, do not provide trip cancellation and interruption coverage if the trip was purchased after March 13, since the pandemic is considered a known or anticipated event.

RCB does not cover medical claims related to COVID-19 if the cardholder travels anywhere outside of Canada after the travel advisory has come into force, according to the bank’s website. 

TD Bank and Scotiabank have a similar exclusion related to emergency travel medical insurance. 

Clancy Zeifman, a spokesperson with Scotiabank’s global communications, said the most current information about trip cancellation and interruption insurance can be found on the bank’s website. “COVID-19 related travel emergency medical claims will not be eligible for insured persons who proceed with travelling outside of Canada on or after March 13, 2020, while the travel advisory is in effect,” Scotiabank’s website states.

For travellers who left Canada before the travel advisory was in force, CIBC offers emergency medical and trip-interruption coverage (if applicable under the credit card) for 10 days from March 13, or to a period that is reasonably necessary for the traveller to evacuate the country safely.

While the borders of many countries remain closed, there are signs that the world is slowly opening up. Some destinations are cautiously easing pandemic-related travel restrictions, according to the fourth edition of the COVID-19 Related Travel Restrictions: A Global Review for Tourism report, released on May 31 by Madrid-based World Tourism Organization (UNWTO), a United Nations agency that promotes responsible and sustainable tourism.

The report, which reviewed COVID-19 related travel restrictions in 217 destinations worldwide as of May 18, showed that seven destinations or 3% of the 217 destinations have eased travel restrictions for international tourism. Several more destinations are engaged in discussions about re-opening the borders. 

While UNWTO Secretary-General Zurab Pololikashvili noted in a statement that the cautious lifting of travel restrictions will create social and economic benefits, “the UNWTO stresses the need for vigilance, responsibility and international cooperation as the world slowly opens up again.”

Caution remains the order of the day as the report indicated that all destinations worldwide continue to have some form of travel restrictions in place. The borders of three-quarters of the 217 countries remain closed as of May 18. 

Travel insurance should be a key component for all Canadians travelling abroad, said AJ Goodman, director of external communications with RBC’s personal and commercial banking. 

“It is important that travellers do not assume they are fully covered for unexpected emergencies through their credit card or provincial plans,” Goodman cautioned. “They need to be aware of the limits on coverage and purchase supplemental travel insurance to fill in any gaps.”