The risks associated with becoming ill whilst abroad and disrupted or canceled holidays have never been higher. It is more important now than ever to understand what risks you are taking when booking a trip and what your insurance does and does not cover.
The global pandemic was declared on March 11th. Insurance that was taken out and trips booked before that date will generally have better cover than insurance taken out and trips booked after it. A global pandemic in modern times is a first so most insurers, tour operators, airlines, and hotels have been working out what their policies should be as they go. This has made it very difficult and confusing for consumers to know what you are legally entitled to.
Since March 2020 insurance policies and travel operators have started to publish clauses relating to COVID and set out what you will be entitled to in certain circumstances. In the following article, we provide some basic information on what to do if your trip has been affected by COVID in any way and also what you should be thinking about before buying travel insurance for 2021 and beyond.
Need To Cancel Your Trip Due to Lock Down
Lockdowns prohibit you from traveling outside your local region unless it is for ‘essential reasons’ and holidays do not fall under this category. If you choose to travel overseas to a destination while the Commonwealth and Development Office (FCDO) has advised against non-essential travel, or domestically against the instructions of the UK Government (which can be different to the FCDO rules), then your insurance policy will be invalid, and any claim will be rejected. The FCDO only governs travel for people resident in England. Scotland, Wales and Northern Ireland are subject to their authorities’ rules so check before you travel.
If you had a holiday booked which you can no longer now go on then what can you do to recover any money you have paid?
In some cases, the airline or travel agent may cancel the flight or holiday and issue a full refund. This is the easiest way to get your money back so check with them first before you do anything else. What happens if the airline, travel agent, or hotel are not going to cancel your trip? Some providers may offer you vouchers or the option to move your booking. If you accept this option bear in mind that if the company goes bust before you can take your rescheduled trip your vouchers will be worthless. Atol have said they will honor refund credit notes (RCNs) issued by any travel firm that goes bust so make sure that you are issued one of these rather than any other voucher or deal.
You can’t claim on your insurance if you accept vouchers or reschedule your trip. Companies, legally speaking, should provide the option of a cash refund as well as vouchers or rescheduling your trip, but in practice, many have simply refused to do so. You can be left in a difficult position if the travel company refuses to offer you a refund. Your insurer will not pay up as the legal responsibility to refund is with the travel operator. Which? has concluded that banks should refund you under Section 75 of the Consumer Credit Act 1974, for purchases by credit card of more than £100, or through the chargeback scheme for other purchases. So that is what you should try next.
COVID cancellation cover
Several insurers have been selling insurance labeled as providing COVID cancellation cover. However, on reading the small print you will most likely find that you are only covered if you catch COVID and have to cancel your trip as a result. No cover is provided if your home region is placed in lockdown.
Travel Insurance for 2021
You will find that standard travel insurance policies don’t provide cover for cancellations due to lockdowns so you must bear this in mind when you book a trip in 2021. You can also find that any cover provided by the insurance disappears if the situation changes after you book your trip; for example, your destination country changes its border entry policy or your home country changes its safe travel corridors.
You should carefully assess what cover is provided by your insurer. Many are simply providing cover but with a general exclusion for any costs, you incur related to COVID – be that cancellations travel disruption or medical care for COVID. Another set of policies specifically covers you for COVID related medical costs but absolutely nothing else. Some schemes provide cover for COVID-related medical costs and some form of cancellation cover; cover varies and it is essential you read the small print as you may find this extra cover is very small and the most likely COVID cancellation costs aren’t covered. Ask yourself what would happen if you were put back into lockdown, your destination hotel closed, your airline went bust, or a family member got COVID and you were required to quarantine – would the policy actually provide any cover?