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Two Canadian insurers have announced they won’t cover coronavirus-related travel trip cancellations and more are likely to follow suit.

Manulife and TuGo announced Thursday they will no longer offer trip cancellation meant for unexpected mishaps because the virus is now a "known" issue.

“There is no coverage for any trip cancellation or trip interruptions claims related to COVID-19 (coronavirus) for policies purchased on or after March 4, 2020,” TuGo’s website advises. “COVID-19 is considered a circumstance known for any policies purchased or trips booked on or after March 4, 2020.”

Up to now, many travellers with trip cancellation insurance have been able to get reimbursed if, after booking their trip, the federal government issued a coronavirus-related advisory to avoid non-essential travel to their destination. Ottawa has already issued such advisories against non-essential travel to China, Iran, northern Italy and parts of South Korea.

Avoid huge costs

One Toronto travel insurance broker told CBC that he believes other insurers will likely jump on the bandwagon, in order to avoid huge costs as the virus spreads around the globe.

"They are opening themselves up to millions of dollars of claims that they will have to pay unless they invoke this," Travel Secure’s Martin Firestone told CBC. "If this thing blows up and it becomes a pandemic, all these countries are going to get on the [no] non-essential travel list."

However, Manulife’s policy, based on a memo obtained by CBC, stipulates if travellers purchase the Cancel for Any Reason (CFAR) option, they can still get coverage. That coverage comes at an extra cost and typically covers up to 75 per cent of a cancelled trip.

As of the beginning of March, the World Health Organization, which is providing daily updates on the virus, reported 90,870 cases and more than 3,100 people have died from it since the start of this year. More than 70 countries have had at least one confirmed case, including 37 now reported in Canada. Most than 80,000 cases are in China, where more than 3,000 people have died.

Airlines waive fees

Meanwhile, Air Canada, WestJet and Air Transat have each announced new policies regarding flight cancellation during the coronavirus outbreak. Air Canada and Air Transat passengers booking a flight between March 4 and 31 for travel over the next 12 months can now make a one-time change at a later date, free of charge.

WestJet passengers booking flights between March 3 and 17 for travel through June 24 will also be allowed to make a flight change.

The airlines’ policy changes are just one example of efforts within the global travel industry to respond to massive losses as a result of the virus. Some experts say the industry is bracing for what could be devastating fallout due to travel restrictions and cancelled trips. It's one of the largest industries in the world, according to CNN, with $5.7 trillion in revenue. It is responsible for an estimated 319 million jobs, or roughly one in 10 people working on the planet.

Frederic Dimanche, director of the Ted Rogers School of Hospitality and Tourism Management at Ryerson University in Toronto, told the Globe and Mail recently this is the biggest crisis the travel and tourism industry has faced since Sept. 11, 2001. “People are in a panic."

The bottom line is if you plan to travel, know your policy. Make sure you talk to your broker about what your travel insurer’s cancellation policy is when it comes to the virus.

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