COVID's Effect on Wedding Insurance and Is It Worth It?

This piece originally ran on Acorns.com.

Get ready for a wedding boom in 2022: An estimated 2.5 million weddings will take place next year, the most the U.S. has seen since 1984, according to Shane McMurray, CEO of The Wedding Report, a market research firm.

To put that into perspective, there were only half as many weddings in 2020, 1.2 million, as people had to postpone their nuptials due to the Covid-19 pandemic.

Next year, couples will spend an average of $24,300, The Wedding Report estimates. That’s a substantial sum, so before saying “I do” to your venue and vendors, consider buying wedding insurance, says Esther Lee, senior editor at The Knot. “With everything that’s transpired during Covid, couples should be especially vigilant about taking precautionary measures as they plan their weddings,” she says. “This, in turn, involves wedding insurance.”

Even though Covid-19 related cancellations or postponements may not be covered by your policy, having wedding insurance “is still worth it,” says Dave Evans, a certified financial planner and the co-founder and president of 401kSleuth who has worked in the insurance industry for 40 years.

“Insurance provides a peace of mind recommended for all couples when planning a wedding,” says Lee. Especially since coverage is generally inexpensive: The average WedSafe wedding insurance policy, for example, is less than $200.

Here’s what you need to know about wedding insurance and what it covers, and why experts say it’s a good idea.

There are two types of wedding insurance policies
​There are generally two types of wedding insurance policies: event liability insurance, which provides coverage for injuries or accidents that occur at a wedding, and event cancellation protection, “which can reimburse financial losses associated with the wedding,” says Steve Lauro, vice president at Aon Affinity, parent company of WedSafe, a seller of wedding insurance.

Liability insurance is often offered or required at venues like banquet halls, vineyards, or historical locations. “It can protect brides and grooms from financial losses due to injuries, accidents, or property damage during the event,” says Lauro.

Cancellation insurance protects a couple’s financial investment in the wedding. “The primary benefit is reimbursing for outright cancellation or postponement of the wedding due to some unforeseen issue,” Lauro says. Liability insurance might cover cancelation costs related to a venue going out of business, an extreme weather event, or a key person in the wedding getting sick.

Cancellation policies can also reimburse you in the case of damage to a wedding dress, for example, or if your florist or photographer don’t show up, he explains.

A basic insurance cancelation policy that covers loss of photos, videos, attire, gifts, rings and deposits usually costs anywhere between $155 and $550, depending on the amount of coverage you want, according to The Knot. Liability insurance, which can cover up to $1,000,000 for accidents, costs approximately $185. But those costs can vary significantly, depending on the carrier.

"‘Most insurance companies are excluding Covid’“
Now, generally, everything I’ve seen is they [insurance companies] have typed up policies to exclude Covid,” says Evans. While there might be policies out there that include coverage of cancelations related to the pandemic, “I haven’t seen one and it won’t be cheap.”
In general, “most insurance companies are excluding Covid because it’s happening too often,” Evans says. “The premium is so small relative to the cost of cancelling a wedding.” Wedding insurance premiums that cost just a few hundred dollars expose insurance companies to high financial losses in the event that Covid-19 does interrupt a wedding.

Even if the policy says it includes Covid-19 related cancellations or postponements, the reality can be very nuanced. “They might say, ‘We cover Covid for the bride and groom, but does that include the family? Is it larger than the family?’ So you have to look for what’s excluded,” says Evans.

And be aware that if you wanted to cancel because cases were rising in your area and you were nervous about contributing to the spread, insurance likely wouldn’t cover that. “Typically, insurance would not cover ‘fear of’ something, whether that be contracting Covid-19 or other issues,” Lauro says. “Most coverage would be triggered when someone is affected, such as actually contracting Covid-19.”

Ask your policy provider “if there is an exclusion in the policy for a ‘known event’ and if the company interprets Covid-19 to be one or not,” Lauro suggests. “Some policies may still provide some coverage related to Covid-19 issues even though we know it is a known risk at this point.”

And when traveling for a wedding outside the U.S., it’s important to make sure your health insurance will cover any unexpected health-related incidents.

Ask questions about your insurance policy
When shopping for a wedding insurance policy, look for specific phrases like “force majeure, meaning an act of God, when signing,” says Lee.

If there’s a hurricane for example, the venue may say that was a force majeureand not reimburse your deposit, which is why you need event cancellation coverage, Evans says. So “make sure to find out what you’re responsible for and what they’re responsible for.”

If you’re having a backyard wedding or a destination wedding, there are a number of other factors to consider. If someone has too much to drink and gets into an accident, or if someone gets hurt in your backyard, you may be responsible for the damage as the “social host.” Liability insurance can help protect you in those types of scenarios, Evans says.

An agent can help you figure out how to make sure you’re covered based on the specifics of your wedding: “Talk to an insurance professional and say, ‘Here are our circumstances,’” he says. “Don’t try to self-diagnose.”
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Make sure you look into policies early enough, too, Lee says: “Some policies will only allow you to purchase insurance within a certain period before the event date, so shop around and talk to several reputable providers about your options.”