The outbreak of a coronavirus (COVID-19) is raising many questions and concerns among travellers and investors. The following information can help you make good decisions about travel insurance, your investments and protecting yourself against fraud.
1. COVID-19 and travel insurance
If you have already paid for your trip and have travel insurance
Contact your travel insurance provider (or your insurer) as soon as possible, specifying your destination. Be sure to do this before you leave. Remember to ask:
- If you are covered in the event you become infected with COVID-19. If so, ask about the coverage conditions (hospitalization costs, early return, extension of stay for treatment or quarantine, etc.).
- What the conditions are for obtaining a reimbursement of expenses associated with the cancellation of your trip due to COVID-19.
Your insurer sets its own criteria for determining when it will provide compensation for trip cancellation due to a problem situation in the destination country. Most insurers base their cancellation criteria on the Government of Canada’s Travel Advice and Advisories This link will open in a new window site. The site is updated frequently, and we recommend that you check it regularly.
Your insurer will inform you of the risk levels at which it reimburses incurred expenses. Reimbursement is generally available at level 3 (“avoid non-essential travel”) and level 4 (“avoid all travel”).
If you plan to travel
Before paying for your trip, ask your insurer or any travel insurance provider:
- If COVID-19 is excluded from its travel insurance offering.
- What coverage is available for your planned destination. The insurer will tell you, if applicable, how the travel insurance contract would apply, taking COVID-19 into account. COVID-19 may be excluded because it is a known risk.
- If its criteria for trip cancellation insurance are based on the Travel Advice and Advisories site. Obviously, your destination must not be considered a risk level 3 or 4 when you purchase your trip and the insurance.
- If your destination is not currently considered a risk level 3 or 4, but the situation deteriorates in the weeks preceding your departure, what the conditions are for reimbursement of the cancellation fee.
- What happens if the situation deteriorates after you arrive. What are the conditions for your return if you need to shorten or extend your stay?
If you prefer to change your plans
You can always choose to postpone your trip.
However, depending on your insurance contract, your insurer would not have to reimburse your expenses if a level 3 or 4 alert has not been issued for your destination.
Other coverage
Check the trip cancellation coverage offered by your travel agency and the airline. Also look into the Compensation Fund for Customers of Travel Agents This link will open in a new window. (French only)
2. COVID-19 and its impact on investment performance
It is hard to predict stock market movements. Many factors other than COVID-19 influence investment value and performance.
Some sectors may be more affected than others. It is very difficult to assess the magnitude of potential losses, which could be temporary.
What should I do if the stock markets fall?
Avoid hasty decisions. Unless your financial situation, personal situation or objectives change, don’t make any major adjustments to your investment strategy, even if the markets are down. The consequences could be unfortunate.
If you invest with the help of a representative, discuss the situation and don’t hesitate to ask if the time is right to make changes to your investment strategy.
- Stay calm. Panic or euphoria can lead to poor decisions.
- Choose your investments in relation to your financial objectives, risk tolerance and investor profile.
3. Watch out for financial fraud!
Events that make the headlines, such as COVID-19, can be used by fraudsters as a pretext for approaching investors. Fraud can take various forms. For example, fraudsters can use the Internet and social media to offer you an investment in companies that are allegedly involved in the prevention or treatment of the virus. They will usually promise high yields without risks and will push you to make a snap investment to take advantage of a “one-time” opportunity.
Be on your guard, ask questions and do your homework before investing. Always check if the person offering you an investment is registered with the AMF.
Remember that there is no such thing as a high-yield, no-risk investment.
When in doubt, contact the AMF.
