Film and TV productions require unique insurance with coverages ranging from animal mortality, to bodily injury on set, to property loss or damage, even to whether a camera is faulty, or the film can’t be processed. Pandemics, on the other hand, are rarely covered. Nearly every modern production policy has communicable disease exclusions – so on the surface, COVID-19 is going to be excluded and the production companies wouldn’t have any luck recouping costs. And that is unfortunate because COVID-19 has caused nearly the entire film and TV industry to cease operations, putting hundreds of productions on hiatus and leaving thousands of workers without a job.
It is safe to say that social distancing and limited crowd size would be difficult to pull off in nearly any production, making a hiatus the most logical outcome. While the production insurance isn’t likely to pay out for the losses incurred because of stalled filing, moving forward, COVID-19 is almost certainly going to make its presence felt. To start, if they didn’t before, all new production insurance policies will almost certainly have specific exclusions for COVID-19 written in.
- Auto insurance
One of the insurers most directly affected by COVID-19 and the ensuing governmental shutdowns is the auto insurance industry. With fewer people driving, the risk models that auto insurance companies used to set premiums have been tossed out. The policies they wrote months ago assumed drivers were going to spend much more time on the road, and thus would have represented a much greater risk to insure. Now that the morning commute is a recent memory for many, countless otherwise insured miles are now not being driven, meaning that the auto insurance industry may have inadvertently overcharged their customers.
In response, companies are sending refunds – typically 15% to as much as 35% — because drivers are on the road less. Those refunds are being sent as statement credits for people on installment plans, or as checks being mailed or direct deposited to people who paid up front. Many auto insurers are also making donations to community relief efforts and to help community organizations. Many are also working with the customers to offer payment relief and waiving late fees and suspending cancellations because someone can’t make a policy payment.
- Life insurance
The pandemic has changed many things involved in applying for new policies. One place that life insurance is being affected is in the realm of international travel. Whenever someone applies for a new life insurance policy, they are given an extensive questionnaire to help assess their risks. That questionnaire has always asked about plans for international travel, but now those questions carry some added weight. That is because if someone has recently traveled to China, Italy, or any number of coronavirus hotspots, the insurance company is more than likely going to delay the date that the policy goes into place to make sure the applicant doesn’t suddenly come down with COVID-19.
The same goes for the health history questions on the application. The application is almost certainly going to ask if the applicant or someone they live with has recently tested positive for COVID-19. Again, if the answer is yes, it doesn’t mean the policy will be denied, but it might mean it will be delayed for a few weeks until after a full recovery.
Another standard part of the application process is what is called a “paramedical exam.” This is when a nurse comes to the applicant’s house and takes vital signs, such as height, weight, temperature, and blood pressure. In many areas of the country that are still under lockdown, those exams are no longer possible, and insurers have had to improvise a bit. One option people can opt for if they don’t want to bother with the paramedical exam is a “no-exam policy,” but that might not be the right option for everyone, because they cost significantly more than traditionally underwritten policies, and their death benefits often aren’t as generous.
The report also provides a look at relevant key issues for the months and years ahead.
“Post pandemic, many changes and questions will likely emerge moving forward. For one, no insurance policy is likely to offer pandemic or infectious disease coverage any time soon. Another question mark is whether states, regulators, and local jurisdictions will step in and try to force insurers to pay for things that they thought were excluded in their policy language,” added Giusti.
The full State of Coronavirus Insurance Report is available here.