COVID-19’s Impact on Health, Travel, Auto, Unemployment, Business, Restaurant, Special Events and Film/TV/Production Insurance, according to a report released by InsuranceQuotes.com.
In what ways has insurance been affected by the COVID-19 pandemic?
InsuranceQuotes.com’s newly released 3,500-word State of Coronavirus and Insurance Report answers the questions, explaining how insurers, consumers, and businesses have all been-and are continuing to be-impacted.
“People may debate whether or not this pandemic could have been foreseen, but in most areas of the insurance industry, they saw it coming 18 years ago. That is because, following the SARS epidemic in 2002, nearly every line of insurance coverage began writing in clauses that excluded pandemics and infectious disease causes, protecting many insurers from having to pay out claims in a time like this. That doesn’t mean the insurance industry has been unaffected, though,” says Michael Giusti, insuranceQuotes analyst and author of the report. “From auto insurance companies offering refunds to idled drivers, to business insurers fending off lawsuits challenging their exclusions, to life insurers finding new ways to underwrite their policies, COVID-19 has rocked nearly every part of the insurance world."
The report provides an analysis of COVID-19’s effect on:
Nearly any special events policy written now is going to have specific language written in excluding COVID-19, even if an infectious disease rider is purchased. With that being said, in the cases of weddings, nearly every venue today requires bridal parties to purchase wedding insurance, and many of those policies did cover infectious diseases.
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.
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.