Confusion of Covid-related insurance leaves holidaymakers at risk of losing out

HOLIDAYMAKERS risk losing out due to confusion over the extent to which coronavirus-related disruption is included in travel insurance policies, Which? is warning.

Its research suggests many travel insurance customers are being left with a false impression about their level of protection if the pandemic affected their holiday plans.

Which? believes some of this is down to poor communication by travel insurance providers and the use of blanket terms such as “Covid cover” or “enhanced Covid cover” on insurers’ websites.

A Which? survey of more than 2,800 travel insurance customers between February and March found three in 10 (29 per cent) have committed to bookings or arrangements for international trips this year.

More than one in 10 (12%) said while they have not booked or arranged travel, they do have specific plans.

Which? asked people if they believe their policies will cover them in certain scenarios, such as in the event of further lockdowns or if they have to self-isolate or test positive for coronavirus.

Half (50%) said they believe they are covered should the Government’s travel advice change after a trip is booked and nearly half (47%) think their policy covers them in the event that local or national lockdowns prevent them from travelling.

Almost half (46%) believe their policy covers them if their airline or holiday company postpones their travel, but does not offer a cash refund.

But when Which? analysed 73 travel insurance providers between October and November 2020, it found cover for those three such eventualities – particularly for when Government travel advice changes – was very rare, with large discrepancies between what policies included.

The consumer champion believes little has changed in recent months.

Since March 2020, many insurers have considered the pandemic a “known event”, and excluded Foreign, Commonwealth & Development Office cancellation cover from new policies and for newly booked trips.

Jenny Ross, Which? Money editor, said: “Without closer scrutiny from Government and regulators of how clearly insurers present their policies, there is a very real chance that many travellers will be left out of pocket yet again this summer.”

A spokesman for the Association of British Insurers said: “With overseas travel restrictions easing, it is important for travellers to take out travel insurance when booking their holiday, primarily to cover potentially very expensive overseas emergency medical treatment bills which can easily run into tens or hundreds of thousands of pounds.

“We urge people to read their policy to understand the scope of cover, as policies bought after the pandemic was declared are unlikely to cover cancellation due to Covid as it is a known risk, and travel insurance is designed and priced to cover unforeseen events.”