The Daily Telegraph - Saturday - Money
Travel insurers flee market as claims rocket
Floods of people are claiming on cancelled trips but fewer than half of insurers are paying. Jessica Beard and Harry Brennan report
Many of Britain’s biggest insurers have stopped selling travel cover due to the outbreak of coronavirus as holidaymakers scramble to secure some protection against cancellations.
Insurance companies including Aviva, InsureandGo and Post Office have already announced they will stop selling policies to cover the costs caused by the virus, as cancellations force floods of people to make claims. Existing policies will be honoured.
It is now “highly unlikely” that any cover for cancellation, abandonment or disruption of a trip because of coronavirus will be available, according to the British Insurance
Brokers’ Association, a trade body.
Travel insurance aims to help with the cost of an unexpected event, typically someone being taken ill abroad or lost baggage, but the virus no longer falls into this category as it has been declared a global pandemic by the World Health Organisation.
LV and Admiral have fled the market altogether, suspending the sale of new travel policies. Others including Aviva and the Post Office are still selling their core travel insurance but optional add-ons that include cover related to the coronavirus will no longer be available.
As more countries move into lockdown and restrict travel across their borders, hundreds of flights have been cancelled and thousands of trips have been affected.
The number of travel disruptions soared after President Donald Trump banned travel to America from all European countries except Britain in an effort to slow the spread of coronavirus.
A lack of available insurance is likely to make travellers change their plans out of fear of being stranded, according to James Daley, of consumer group Fairer Finance.
He said many would now be questioning whether it is a good idea to travel without cover. Those who do buy a policy may fear it will be useless in the event of them catching coronavirus overseas or being unable to get home. “At a time when reputable companies like LV are pulling out of the market altogether, don’t go abroad without travel insurance but make sure you get it from somebody who is still willing to sell a policy and is very clear about what they will and won’t cover,” he said.
‘Make sure you travel with insurance and are clear about what a policy will cover’