Is it possible to get travel insurance with full coronavirus protection?

There are no travel insurance firms providing total cover against the coronavirus and related disruption for customers looking to travel abroad, new research has revealed.

However, the industry is charging customers more despite protections that were in place before the pandemic disappearing, according to data from consumer group Which?.

It analysed policies offered by 73 travel insurers, examining whether a customer would be covered in four different scenarios.

These include if a customer gets Covid-19 abroad and requires treatment as well as  if someone gets it ahead of a trip and has to cancel.

Getting proper cover on your travel insurance for coronavirus can be difficult – and expensive

It also analysed what happens to those who have been exposed to the virus or have shown symptoms but don’t have a positive test or diagnosis, are self-isolating and have to cancel plus what happens to people who are affected by wider disruption resulting from the pandemic, forcing them to abandon travel.

Which? said it was unable to find a single policy in its study that will cover Covid-19 as fully as insurance available before March 2020.

Whilst all 73 providers cover emergency medical claims and costs for emergency medical repatriation should customers become ill with Covid-19 on holiday, 17 insurers offer nothing beyond this and are classed as having a ‘basic’ cover rating.

Offering cancellation cover, when customers have to cancel their trip as a result of testing positive for Covid-19 ahead of travelling, in addition to medical cover, qualifies insurers for Which?’s ‘low’ Covid-cover rating.

Nearly 60 per cent of insurers, equivalent to 43 providers, included in the analysis fall into this category.

At the time of its research between October and November, just one provider, Nationwide Building Society, offered cancellation cover for changes in Foreign and Commonwealth Office advice related to the virus.

It has since announced that from January, this will be phased out. As a result, it was not deemed to provide ‘complete cover’ for future trips.

Providing cancellation cover due to self-isolation, in addition to standard cancellation and medical cover, qualifies insurers for Which?’s ‘superior’ rating – but just 13 insurers offer this protection.

However, not one insurer was judged by Which? to offer ‘complete’ cover. 

Only 13 insurers provide cover for those cancelling after they were told they must self isolate

Only 13 insurers provide cover for those cancelling after they were told they must self isolate

This would require customers to be able to claim in the event of cancellation caused by the Foreign and Commonwealth Office advice changes as well as government lockdowns, which is one of the most likely ways the virus could affect plans.

Five providers – the AA, AXA, Halifax, Puffin and TUI – said their customers can make cancellation claims if they can’t travel because of a localised or national lockdown, providing they can’t recoup lost costs from other sources.

However, they still don’t cover changes to FCO advice which means that, as it stands, insurance alone won’t offer genuinely comprehensive cover while Covid-19 remains a threat.

Price increases 

Whilst many insurers will be struggling due to the coronavirus, reducing cover is one way for them to deal with the considerable costs. However, they could also increase premiums.

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

When Which? asked insurers if they had raised their prices or would in the near future because of the pandemic, 42 – almost two thirds of those that answered the question – said they had or would.

In some cases this appeared to be a consequence of the high number of claims they have handled in recent months but others said it was also because of improvements they have made to their cover.

Which? said it believes it can not be justified for insurance providers to drastically reduce cover across the market, while at the same time increasing prices.

It considers this to be out of step with the Financial Conduct Authority’s expectations on firms in relation to cover impacted by coronavirus and raises a question around the value of travel insurance products today.

Ahead of a likely return to some form of large-scale international travel next year, Which? is calling for the regulator to investigate the travel insurance market.

This is to ensure that it is working fairly for consumers when they are in a position to start booking trips, and can get value for money from their policies while being confident that they will be protected, in what is likely to be another unpredictable year for travel.

Many flights have been cancelled over the last few months as a result of the coronavirus

Many flights have been cancelled over the last few months as a result of the coronavirus

Jenny Ross, Which? money editor, said: ‘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.

‘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.

‘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.’

Which? recommends getting a policy with £2million of medical cover for Europe, or £5million beyond, although the Europe figure could increase due to Brexit. 

It also recommends a minimum of £3,000 cover, or the value of your holiday.

A spokesperson for the Association of British Insurers added: ‘Travel insurance is primarily an emergency medical product and ABI members will continue to provide cover medical expenses for Covid-19 overseas should the worse happen.

‘Travel insurers have supported customers whose travel plans were affected by the first lockdown, and expect to pay a record £275million in cancellation claims to customers who have had to cancel holidays and who have faced disruption when travelling abroad.

‘Most travel insurance policies taken out after the pandemic was declared are likely to have some Covid-related exclusions for cancellation cover. 

‘This is because the purpose of travel insurance is to cover for the unexpected and Covid-19 cancellation claims have become more of a probability than a possibility.’

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