Does travel insurance cover Coronavirus?

In short, the answer is 42% Yes, and 58% No according to Andrew Bawden, MD of Reactive Claims, a leading travel claims handler reporting the coverage of policies sold in the UK.

58% of all travel insurance policies sold in the UK exclude the consequences of the Coronavirus pandemic. That’s a shock! The larger proportion of these having been bought online through aggregator sites promoting price as priority.

In response, the Association of British Insurers has recommended all their members extend policy coverage for up to 60 days for those still stranded abroad, with most having now been repatriated by a colossal effort worldwide.

What’s interesting is that only 50% of those insurers selling policies in the UK are members of the ABI who voluntarily comply with the professional codes of conduct. The Insurance Ombudsman and the Financial Services Authority have issued statements expecting their insurers to treat customers fairly and one has to have faith that this will highlight those interested in supporting their customers at this most acute time of need.

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What are travel insurance companies doing about Coronavirus?

Three camps exist, those covering Coronavirus, those declining Coronavirus and the third, pragmatic camp who customarily exclude pandemic cover but nevertheless recommend that it is still worth submitting a claim once all other avenues of travel agent, tour operator and credit card payback have been exhausted.

As we are still in the middle of this firefight and yet to determine many unforeseen consequences, the first glaring reality is already rearing its ugly head, that buying cheap isn’t always the same as buying smart.

It goes without saying now that one should always look for policies that don’t already exclude pandemics, but it is wise to also check for the sting in the tail and find indemnity for ‘changes in advice by the Foreign and Commonwealth Office (FCO)’. Take a look under Travel Disruption or Catastrophe Cover for the comfort you desire.

Often the question now is asked, should travel insurance pick up the tab? After all, if we’re not travelling then insurers aren’t likely to see the customary claims for medical or lost baggage. This argument whilst understandable, is countered by the overwhelming volume of claims leading some insurers already to need recapitalising.

Should travel insurance pick up the tab therefore? Of course they should. But whether they are obligated to, is another thing altogether.  The age-old adage of ‘buyer beware’ and ‘you get what you pay for’ could never be more true with nearly 60% of travellers left hanging.

It has to be appreciated that one can’t insure a house if it’s already on fire, and the protection afforded by insurance by its very nature is designed to cover unforeseen circumstances. So we can’t imagine anybody getting cover if they book travel against FCO advice or put themselves at risk by travelling to an area already locked down by Covid-19.

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What next for travel and Coronavirus?

We’ve yet to see how travel recovers. Will it be to restricted destinations, for restricted reasons, for limited persons or with added health checks for those transiting ports and airports.  Nobody wants a second wave of this horrific virus.

You can be sure of one thing, there are going to be plenty of complaints, lots of unhappy people, and a quite justifiable inquiry of insurers happily taking premiums but not paying these claims. The only comfort we can have is that the insurance industry, just like us, never saw this coming.

Good grief! We are all going to need a holiday after this, and there are going to be some very, very harrowing and tragic stories in the aftermath.  I am hugely comforted however by the compassion of those in both the insurance and assistance businesses with whom I’ve spoken whilst researching this, not least their collective view that this is not just premiums and policyholders but men, women, children, families and neighbours and many of their own stranded both personally or financially in their most crucial hour of need.

Bless the dedication and selfless commitment of medical and assistance personnel worldwide and have faith.  Those insurers that choose to behave both compassionately and professionally will thrive with pride and honourable reputations where others may fail.

James Beagrie

James A Beagrie
Managing Director
Email: james@meonvalleytravel.com
Connect: LinkedIn