Coronavirus will cost travel insurers … big

Stack of British notes

UK travel insurers could be preparing to fork out as much as £275 million (US$329 million) in coronavirus-related claims, according to the Association of British Insurers (ABI)

Estimates from the trade body suggest that it expects consumers to make a total of around 400,000 coronavirus-related claims. Most claims are anticipated to be for travel cancellations, while some will be for disruption costs incurred overseas.

Travel insurers are helping customers get through these tough times

With claims expected to continue flooding in in the coming weeks and months, the ABI said it expected the coronavirus claims figure to reach more than double what insurers paid out in the whole of 2019, and to surpass the highest annual figure for cancellation payouts, which was recorded in 2010 at £148 million (US$177 million).

Mark Shepherd, Assistant Director and Head of General Insurance Policy at the ABI, said: “At this unprecedented time, travel insurers are helping soften the financial blow for thousands of customers whose travel plans have been cancelled or disrupted by coronavirus.

“Along with compensation from sources such as airlines and credit card providers, travel insurers are helping customers get through these tough times.”

Most insurers have announced that coronavirus is now a foreseeable disruption to travel and therefore no longer falls within the ‘unpredictable causes’ needed for a claim. Existing policies should cover travellers for trips booked before the threat of coronavirus became clear − around 13 March.