Insurance: Essential Service Or Not?

During the COVID-19 pandemic, insurance was deemed an essential service in many places, including South Africa, Canada, and several US states. This meant that insurance companies could continue to operate and insurance employees could continue to work, even in states and provinces where only essential businesses were allowed to keep operations going. This was good news for consumers, brokers, and insurers, as it allowed people who had been displaced by disasters such as fire or flood to continue receiving the money they needed to pay for basic living expenses.

Insurance during COVID-19

Insurance services are considered an essential service in many places. During the COVID-19 pandemic, insurance companies were allowed to continue operating in places like South Africa, Kenya, and Zambia, as well as in several US states, including Alaska, California, Connecticut, and Delaware. This was to ensure that insurance brokers could continue to serve as the first point of contact for customers, especially in cases of emergencies.

Travel Insurance

The COVID-19 pandemic has severely disrupted travel, leaving many travellers confused about their insurance coverage. It is important to note that standard travel insurance policies do not typically cover trip interruptions or cancellations caused by the threat of viral infections. Such policies usually exclude coverage for cancellations due to an epidemic, pandemic, or similar public health events. However, some travellers opt for "Cancel for Any Reason" coverage, which may provide some reimbursement if they choose to cancel their trip out of caution.

Medical Insurance

COVID-19 medical insurance is available for those travelling within the USA or outside of it. These policies cover coronavirus infections as long as the policyholder is infected after the effective date of the policy. International medical insurance is also available for F visa students and J visa exchange visitors travelling to the USA.

Trip Cancellation Insurance

Trip cancellation insurance covers prepaid trip costs in case you have to cancel your trip due to specified reasons, such as sickness, death in the family, or property damage. Regular trip cancellation insurance does not cover cancellations due to fear of travelling during the COVID-19 epidemic. However, if you get sick with COVID-19 and cannot travel, your trip cancellation insurance may cover the costs.

COVID-19 Vaccination, Testing, and Treatment Coverage

In the US, most health insurance plans cover COVID-19 vaccines at no cost. People without health insurance or whose insurance does not cover the vaccine can get a free vaccine from local community health centres, health departments, or pharmacies participating in the CDC's Bridge Access Program.

Regarding testing, Medicare will cover laboratory COVID-19 tests at no cost, while coverage for individuals with private health insurance will depend on their specific plan. Medicaid and the Children's Health Insurance Program (CHIP) will continue to cover COVID-19 testing, including at-home testing, through September 2024.

Treatment for COVID-19 can include doctor's visits, hospitalizations, prescription medications, and other medical services. As with testing, the coverage for these services will depend on the individual's health insurance plan. State Medicaid and CHIP plans must cover COVID-19 treatments without cost-sharing through September 2024, while those without insurance will have to pay out of pocket.

Insurance as a critical infrastructure sector

The insurance industry plays a crucial role in supporting governments to improve the resilience of critical infrastructure against natural disasters. The underwriting expertise of insurance companies offers a detailed risk assessment of critical assets, helping governments to "price" the risk exposure of their critical infrastructure. By pooling risks and providing financial compensation, insurance helps restore destroyed assets in the wake of a disaster.

In the context of the COVID-19 pandemic, insurance was deemed an "essential service" in many places, including Quebec, Ontario, South Africa, and numerous U.S. states. This allowed insurance professionals to continue working, even in states where only essential businesses could remain operational. Treasury Secretary Steven Mnuchin issued a memorandum specifying that financial services, including insurance, are a "critical infrastructure sector."

The Department of Homeland Security (DHS) in the U.S. identifies 16 critical infrastructure sectors, including the Financial Services Sector, which encompasses insurance companies. These sectors are considered so vital that their incapacitation would have a debilitating effect on security, national economic security, public health, or safety.

In the face of rising cyber threats, the resilience of critical infrastructure sectors like the Energy Services Sector, the Dams Sector, and the Nuclear Reactors, Materials, and Waste Sector, is increasingly important. The insurance industry has a role to play in addressing these risks, but there are challenges in assessing systemic cyber risks.

In summary, insurance is indeed considered a critical infrastructure sector, and its role in protecting and restoring critical assets in the face of disasters is essential.

Insurance services in South Africa

During the COVID-19 pandemic, insurance services were considered an essential service in many countries, including South Africa. In March 2020, South Africa went into lockdown to mitigate the spread of COVID-19, with people only allowed to leave their residences to perform an essential service, obtain an essential good or service, collect a social grant, or seek medical attention.

The Disaster Management Act, 2002, defined 'insurance services' as essential services. This meant that insurance businesses were allowed to continue operating during the lockdown, but with some restrictions. For example, agents visiting clients to sell policies were not considered essential and were prohibited.

In South Africa, there are many insurance providers offering a range of life insurance policies. Some of the well-known insurance companies in the country include:

• 1Life
• ABSA
• Alexander Forbes
• Assupol
• Auto & General
• AVBOB
• Budget
• Clientèle
• Dialdirect
• Discovery
• First for Women
• Guardrisk
• Hollard
• Instant life insurance
• IWyze
• Liberty
• Metropolitan
• MiWay
• Momentum
• Old Mutual
• OUTsurance
• Sanlam
• Simply Life
• Stangen

These companies offer various life insurance plans that can cater to the unique needs of South Africans, such as protecting dependents, ensuring debts are paid, and providing financial security for loved ones. The availability and specifics of these plans may have changed since the COVID-19 pandemic.

Insurance brokers as a point of contact

Insurance brokers are often the first point of contact for customers. In the event of an emergency, such as a fire or flood, people need to get money quickly to pay for basic living expenses. While insurance companies are responsible for settling claims, it is the broker who can put the money directly into the hands of the customer.

During the COVID-19 pandemic, insurance was declared an "essential service" in many places, including South Africa, Kenya, Quebec, Ontario, and several US states. This meant that insurance brokers could continue to operate and provide this vital point of contact for customers.

Brokers act as intermediaries between the consumer and the insurance company, helping the former find a policy that suits their needs. They are trained experts who can analyse a customer's needs, negotiate with insurers, and recommend coverage that fits their budget. They can also help customers decide whether to file a claim, although only the insurer can confirm what payment will be received.

Brokers are particularly useful for those with complex insurance needs, such as landlords or small business owners who need several policies. They can save customers time and money by doing the research and finding the best policy for the right price.

However, it is important to note that brokers may charge a fee for their services, and this should be disclosed upfront. In some cases, it may be more cost-effective to compare rates online and purchase insurance directly from the insurer.

Insurance services in a state of emergency

During a state of emergency, insurance services are considered essential. In the case of the COVID-19 pandemic, insurance was deemed an essential service in many countries and states, allowing insurance companies to continue operations while other businesses were ordered to close.

In the United States, the Department of Homeland Security provided guidance to states, listing insurance as a "critical infrastructure sector". However, the decision to deem insurance an essential service was ultimately left to individual states. Many states, including Alaska, California, Connecticut, Delaware, and Hawaii, included insurance as an essential business, allowing insurance employees to continue working during lockdowns.

In Canada, insurance was also deemed an essential service during the COVID-19 pandemic. This allowed insurance companies to continue operating and serving customers, including processing claims and issuing cheques to those who needed money for basic living expenses after being displaced by fire or flood.

In South Africa, insurance services were also considered essential during a COVID-19 lockdown in 2020. However, it was clarified that agents visiting clients to sell policies did not constitute an essential service and were not permitted during the lockdown.

In a broader sense, essential services during a state of emergency are those daily services that are critical to preserving life, health, public safety, and basic societal functioning. These typically include health, medical, and social services; public safety and security; food and shelter public services; and other essential services like energy, utilities, and telecommunications.

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