No travel insurer provides ‘complete’ cover for coronavirus, claims Which?

‘Our research shows that consumers are facing the double whammy of significantly reduced cover and increased prices,’ says Which? money editor

Travel insurance policies aren’t the full package, says consumer champion

Not a single UK travel insurance provider offers “complete” holiday cover for coronavirus, claims Which?.

The consumer champion has released new research revealing that, of the 73 insurers it analysed, none had a policy that would cover for all four Covid-related scenarios that would result in a cancelled or disrupted trip.

These were: contracting Covid-19 abroad and requiring treatment; contracting Covid ahead of a trip and having to cancel; being exposed to the virus or displaying symptoms (without a positive test or diagnosis) and therefore needing to self-isolate; and abandoning travel due to wider disruption resulting from the pandemic, such as changes in official rules and advice.

Seventeen of the insurers covered nothing beyond emergency medical claims and costs for emergency medical repatriation should travellers become ill with Covid-19 on holiday, earning them a “basic” rating from Which?.

The next rating band, “low”, was awarded to 43 providers who also offered cancellation cover in the event that a traveller tested positive for Covid-19 ahead of their trip.

Just 13 insurers qualified for Which?’s “superior” rating by additionally offering cancellation cover in the event that the policy holder has to self-isolate because of suspected exposure to coronavirus – for example, if instructed to quarantine by NHS Test and Trace.

However, none of the firms met the requirement for “complete” cover status: allowing travellers to claim in the event of a cancellation caused by changes to Foreign and Commonwealth Office (FCDO) advice or government lockdowns.

Five insurers – the AA, AXA, Halifax, Puffin and TUI – do allow customers to claim for holiday cancellation as a result of a localised or national lockdown (providing they can’t recoup lost costs from elsewhere).  

But none of them cover cancellations stemming from changes to FCDO advice, even though the vast majority of policies are invalidated if you travel somewhere the Foreign Office advises against going.

The one insurer who does provide this cover – Nationwide – is scrapping it as of 1 January.

At the same time as the level of cover has been reduced across many policies, the price of travel insurance has also gone up, according to Which?.

GoCompare said that its 20 cheapest single-trip quotes for a 24-year-old traveller going on a one-week holiday to Italy had increased by 17-34 per cent between October 2019 and October 2020.

Almost two thirds (42) of insurers who responded to Which?’s query about whether they had raised their prices or anticipated doing so in the near future said they had or would.

Which? is calling on the regulator, the Financial Conduct Authority (FCA), to investigate the travel insurance market to ensure it is providing fair cover for consumers.

“Coronavirus has had a seismic impact on the travel insurance market and our research shows that consumers are facing the double whammy of significantly reduced cover and increased prices,” said Jenny Ross, Which? money editor.  

“While it’s still unclear how soon holidaymakers will return to the types of trips that took place before the pandemic, it’s vital that when they do comprehensive cover is available at a decent price if things go wrong.

“If not, the travel industry will not be able to rebuild confidence that it lost at the start of the pandemic. The FCA should act now rather than later to ensure that consumers will be protected on future trips, and that insurers are treating customers fairly.”