Coronavirus and Insurance

[Lorenzoid]

Known risk is an oxymoron. People buy insurance to cover known risk. I would never buy fire insurance, unless I at least considered the possibility my house would burn down. This is the same as before Coronavirus - I knew there was a risk flights, hotels, liveaboards, etc could cancel, otherwise I wouldn't buy insurance.

Your analogy is reasonable on its face, but look at it this way: The insurer sells home insurance policies for X dollars, based on the risk of the average house burning down being Y. If Y suddenly increases by some reasonably certain amount, they can continue selling policies simply by increasing X. But the risk of flights being cancelled due to the novel coronavirus is a moving target--they can't reasonably recalculate the premium they would have to charge to remain profitable, so they just refuse to sell new policies that would otherwise have covered such cancellations. From the insurer's perspective, the risk is not "known"--it can't be calculated with enough precision to enable them to price insurance for it.

 

[JackOfDiamonds]

I work in travel insurance and while I dont know how its like for DAN or every insurance company there is i can tell you that the company i work for and the vast majority of our colleagues are not covering any thing relating to a pandemic or outbreak of virus etc, the huge spike we got because of the Corona is overwhelming.

I know of 3 companies that halted trip cancellation coverage altogether.

 

[bvbellomo]

Your analogy is reasonable on its face, but look at it this way: The insurer sells home insurance policies for X dollars, based on the risk of the average house burning down being Y. If Y suddenly increases by some reasonably certain amount, they can continue selling policies simply by increasing X. But the risk of flights being cancelled due to the novel coronavirus is a moving target--they can't reasonably recalculate the premium they would have to charge to remain profitable, so they just refuse to sell new policies that would otherwise have covered such cancellations. From the insurer's perspective, the risk is not "known"--it can't be calculated with enough precision to enable them to price insurance for it.

It is the job of the insurance company to calculate Y and know how much to charge and if they cover it - this is what insurance companies do.

If Dan said they weren't covering it, that would be reasonable. It would also be reasonable if they said such events are more likely, so the policy costs more. But I was told some things would be covered, others would not be covered, and they couldn't immediately tell me which were which, and I will be better covered buying the policy now instead of waiting to get a straightforward answer.

 

[Jcp2]

DAN May not know as their underwriter may be changing things very quickly.

 

[flyboy08]

DAN May not know as their underwriter may be changing things very quickly.

Does DAN cover influenzas? If they do, then they should cover Covid19. If not, then no....

 

[drk5036]

Does DAN cover influenzas? If they do, then they should cover Covid19. If not, then no....

you should stop thinking reasonably, because nothing is reasonable anymore.

 

[bvbellomo]

Does DAN cover influenzas? If they do, then they should cover Covid19. If not, then no....

The issue seems to be whether WHO calls it a pandemic. If they do, it is not covered. If you get the flu but no one else does, that's covered.

 

[martincohn]

That would truly burn my ass, if I planned a liveaboard a year in advance, bought trip insurance, and the flight were cancelled or the liveaboard cancelled and I couldn't get the rest of the trip insured because "It was a known situation".

Instant mental picture of a wookie (big fury thing from Star Wars) running around with it's ass on fire...LOL

 

[JackD342]

I don't get it. Seems like everyone has forgotten that it will all be resolved when the weather warms up in April.

 

[Dogbowl]

I don't get it. Seems like everyone has forgotten that it will all be resolved when the weather warms up in April.

Not sure if you’re being sarcastic but if you’re not, can you explain why it is expected to resolve in April? I know flu resolves in the spring and summer, but why or how? It can’t simply be warm weather can it? Singapore is hot and they got cases and so did other warm destinations.