The effect of COVID-19 on the lives of every American cannot be overstated. What we cannot know yet is how those effects will continue into the future. We buy insurance to protect us in the event of future calamities. A variety of different types of insurance could potentially be triggered by the varying effects of the disease. As it can be hard to know what the future could hold, the points below summarize the different ways your insurance could be involved in COVID-19 repercussions in the months and even years ahead.
It is difficult to know with certainty the range of long term health issues that could be caused by COVID-19, as the virus has only plagued us for approximately six months. Doctors predict the long-term effects will be similar to other coronaviruses like SARS. While 80% of sick patients had “mild” cases, of the 20% who did not, they could experience a variety of long term effects. COVID-19 survivors are expected to follow the path of severe respiratory issues often seen after recovery from other respiratory illnesses. That could mean lung fibrosis, reduced lung capacity and difficulty breathing and fatigue. Preliminary data out of China demonstrates that 20% of patients hospitalized with COVID-19 had heart damage. Patients also experience increased blood clotting. Early studies from Asia show that COVID-19 attacks T-cells in a manner similar to HIV. Doctors are also finding that close to half of those hospitalized for COVID-19 have blood or protein in their urine, which is an early indicator of kidney damage, and up to 30% of patients in New York and Wuhan lost some level of kidney function. Liver damage, intestinal damage, and neurological malfunctions have also been reported.
Right now, government officials are promising that “COVID-19” treatment will be free. But what exactly does that mean? And what happens if you are among the thousands who may have long-term health effects from the virus? The most recent guidance from the Centers for Medicare and Medicaid Services, issued April 11, 2020, states that insurance companies have voluntarily agreed to cover without charge urgent care visits, emergency department visits, doctor office visits, and testing for COVID-19. It does not reference long term hospitalization, or coverage for long term health issues after recovery. The guidelines also do not state if visits are covered if the insured has symptoms of COVID-19 but the tests are negative.
It is unlikely that most workers can make a successful short-term disability claim for being unable to work due to quarantine, either because of shut-down, or because of actual exposure to the virus. While it is possible that courts could find in favor of a claimant who needed to avoid their workplace because of a high-risk condition, that would be decided on a case by case basis. However, if someone contracts COVID-19, that would certainly be a basis for short term disability. In the event a COVID-19 survivor suffers long term health effects from the virus, that individual may want to consider extending their claim to a long term disability claim. Every situation is unique. The stated long term effects of COVID-19, including reduced lung capacity, fatigue, heart issues, and organ damage, can all create symptoms that have the potential to be disabling depending on their severity and the requirements of one’s occupation.
People with underlying medical issues are at greater risk of health issues for contracting COVID-19, and those underlying issues may also create more significant medical needs during and after recovery. People who have respiratory issues, including asthma, may find themselves struggling after “recovery.” People who have diabetes are at greater risk, as are people with heart conditions. All of these people may find their underlying issues have become much more severe after recovering from COVID-19. Patients may also find themselves struggling with mental health issues after facing a severe illness, hospitalization, and protracted recovery. Anxiety, depression and PTSD can all cause symptoms of fatigue, emotional instability, cognitive issues and physical reactions that can be disabling.
Accidental Death and Dismemberment Insurance
COVID-19 itself is unlikely to be considered an “accident” that would trigger AD&D insurance. But what if you or a loved one contracts it when in the hospital after suffering an unrelated accident? Such situations often do result in courts finding that the accident triggered the chain of events that led to the death.
COVID-19 deaths should be covered as any other death from an illness under a life insurance policy. As discussed above, it is unlikely to trigger any “accident” provision that might increase the payout, unless the deceased contracted COVID-19 while receiving treatment for an injury caused by an accident.
Workers Compensation Insurance
Workers compensation insurance is unlikely to approve a claim based on the stay-at-home directive alone. If a person contracts COVID-19 because they have an essential job and contracted the virus at work, that would be a basis for a workers compensation claim.
Most homeowner insurance policies explicitly exclude viruses and bacteria, meaning that they will not cover the medical expenses of, or a lawsuit from, a friend who believes he caught COVID-19 from a member of the insured’s household.
Business Income Insurance
Many commercial insurance policies include coverage for business interruption/business income, which provides insurance coverage for lost business income. Most of these policies require that the lost income be due to “physical loss or damage” to the business premises. It is an open question whether COVID-19 is considered “physical loss or damage.” Courts have found that business premises contaminated with bacteria, or with air quality issues or pollution issues, have sustained “physical loss” even though there was no structural loss. The policies also generally cover “civil authority” disruption when a building is closed because of government orders. Again, the policy language general limits this coverage to “physical loss or damage” at another premises that required the shutdown of the insured premises as well. At this time no courts have ruled on whether the nationwide stay-at-home order triggers this clause. Each business will have different coverage, as some policies specifically exclude viruses while others do not mention virus claims, or even specifically include them as an endorsement. A number of lawsuits have already been filed to clarify these new legal issues.
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