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Travel Insurance and Coronavirus

Jun 19, 2020

Coronavirus has had a huge impact across the world. And travel of course has been severely impacted. With flights grounded, holidays cancelled and people having difficulty getting home from holidays as the pandemic took hold.

Recent ABI figures suggest as much £275million will be paid out for travel insurance claims linked to Covid-19.

What impact has Coronavirus had on travel insurance?

The impact of Coronavirus on travel has been unimaginable. And the travel insurance industry has therefore been hit by claims relating to Coronavirus.

In light of this ABI travel insurance members have made 6 pledges relating to Coronavirus which you can read about here.

Some insurers have stopped selling new travel insurance policies during the pandemic.

Whilst others are limiting the cover available relating to Coronavirus.

For example:

  • Not covering cancellation/disruption claims relating to Coronavirus on new travel insurance policies sold
  • And some may find that their existing annual policy may also not cover them against cancellations/disruption caused by Coronavirus for trips booked after early/mid-March.

It is important to keep in mind current FCO advice. The FCO is currently advising against ‘all but essential travel.’ And this has been the case since mid-March 2020.

Whilst the FCO advice remains in place, travel insurance is likely to be invalid if you do choose to travel. This is because many travel insurance policies have restrictions in place which state that cover will not be provided if you travel against FCO advice.

Read more from the Association of British Insurers regarding travel insurance during the coronavirus pandemic.

Will this result in limitations being applied to travel insurance policies?

As above, some travel insurers are not currently selling new travel insurance policies.

And some insurers are selling new policies but no longer covering cancellations/disruption caused by Coronavirus for future trips.

So yes, with regards to Coronavirus, it is likely that limitations will be applied to travel insurance.

Will travel insurance cover cancellations relating to Coronavirus?

Ultimately the purpose of travel insurance is to insure against unknown events.

Coronavirus is now a ‘known event’. And booking a future trip at the current time comes with a risk of needing to cancel or suffering disruption due to Coronavirus.

At the current time it is likely that accessing a new travel insurance policy which will insure against cancellation or disruption due to Coronavirus will be difficult. Whether this changes as the pandemic comes under control remains to be seen.

Of course, travel isn’t currently possible due to the FCO advice. And if you do travel against FCO advice then your travel insurance policy will most likely be invalidated anyway.

But when this changes, allowing people to travel again the cancellation or disruption risk is still there if you:

  • Catch Coronavirus yourself
  • Are asked to self-isolate for 14 days as part of the Governments track and trace system after coming into contact with someone who has contracted Coronavirus

Some people who bought or renewed a travel insurance policy before early/mid-March when the full disruption of the pandemic became clear may be able to claim for cancellations or disruption due to Coronavirus. But as always it is best to check with your travel insurer for exact details of what your travel insurance policy will and won’t cover.

What travel insurance will be available for holidays in 2021?

This is a current situation which is still moving and changing. And whilst some insurers have put sales of travel insurance on hold, others are still selling travel insurance.

So yes, it is likely that you will be able to access travel insurance for a 2021 holiday. But exactly what cover you are likely to be able to access with regards to Coronavirus remains unknown.

There may be policies which will provide cover for medical issues caused by Coronavirus whilst you are on holiday. But it is still to be seen if some form of travel insurance exists for cancellations/disruption relating to Coronavirus before you travel.

Check with your travel insurer for exact details of the Coronavirus cover that your existing policy includes. And do your research before purchasing a new travel insurance policy with regards to whether you will be covered for anything relating to Coronavirus.

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