Which? calls travel insurance coverage into question

Following a study into 73 policies, Which? claims travel insurers are not providing appropriate cover for Covid-19 and related disruption for travellers.

“[It] cannot be justified for insurance providers to drastically reduce cover across the market, while at the same time increasing prices,” the organisation said. “This is out of step with the Financial Conduct Authority’s (FCA) expectations on firms in relation to cover impacted by coronavirus, and it raises a significant question around the value of travel insurance products today.

The consumer watchdog is therefore calling upon the financial regulator to investigate the travel insurance market ‘ahead of a likely return to some form of large-scale international travel next year’.

No insurer is offering ‘complete’ cover

The investigation launched by Which? looked at the cover offered by 73 providers, to determine whether they offered ‘basic’, ‘low’, ‘superior’ or ‘complete’ cover.

• While all 73 providers were found to cover emergency medical claims and costs for emergency medical repatriation should the policyholder become ill with Covid-19 while on holiday, 17 of these offered nothing beyond this, and were therefore classed by Which? as having a ‘basic’ cover rating.
• Forty-three were given a ‘low’ cover rating, as they additionally offered cancellation cover for if the policyholder tested positive and had to cancel ahead of travel.
• Thirteen also provided cover for cancellation cover due to self-isolation, in addition to standard cancellation and medical cover, and therefore earned Which?’s ‘superior’ rating.
• But not one single insurer investigated by Which? was given a ‘complete’ cover for Covid rating, as they were not found to provide cover for customers to claim in the event of cancellation caused by Foreign and Commonwealth Office (FCDO) advice changes, as well as government lockdowns.

Rebuilding confidence with sufficient Covid coverage

“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,” commented 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.”

With news that UK travellers are planning to travel internationally in 2021, Which? is right. UK travel insurers need to enhance their offerings.