What to do if coronavirus has put your holiday on hold

The effects of the coronavirus are now being felt far and wide. Many of us have had to cancel holidays or are worrying about upcoming trips. At the same time the travel industry is reeling from travel restrictions and insurers are trying to minimise their losses. So, where does that leave your right to a refund?

The situation is changing all the time, but this week the government asked that we avoid all non-essential foreign travel for the next 30 days. That means if you have an international trip booked that departs in the next month you can get help from your airline or travel firm. They have a duty to offer you either your money back or an alternative trip.

You should speak to your travel provider rather than your insurer. Your travel insurance may cover you for any other non-refundable expenses associated with your trip, but it will depend on your level of cover.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

How soon were you due to leave?

You also need to consider when you are due to travel. Many firms are only offering flexibility on trips due to take place in the next few weeks. For example, British Airways is allowing passengers booked on flights taking off before 31 May to change their destination or date of travel with no fees. If your trip is far in the future – more than 12 weeks roughly – it is unlikely you will be offered any flexibility.

If your trip is some weeks away then you may be able to get a refund through your travel insurance, but it is unlikely. “The only deals that will help must include ‘cancel for any reason’ clauses and only 9% of policies sold have these,” says Alice Grahns in The Sun.

If you are concerned about a future trip, contact your travel provider to see what their current policy is on refunds and amendments.

Over the coming weeks and months it is highly likely that some travel firms will go bust. If this happens you may be able to claim a refund for your trip from your insurance provider.

Many travel insurance policies include cover if your airline or travel company goes bust. Check your own to see if you are covered. If you aren’t you could speak to your insurer to see if you can upgrade your policy to include protection against airlines or travel agents collapsing. If your travel provider does go under – and you paid for a trip costing £100-£30,000 on a credit card – you should also be able to claim a refund via your credit-card provider.

Under Section 75 of the Consumer Credit Act your credit-card firm is equally liable if something goes wrong with your purchase. This means you can go to them for a refund if you can’t get your money back from the travel firm. Similarly, if you paid for a trip on a debit card you may be able to get a refund through the chargeback system.

If you have a holiday planned for the future and haven’t purchased travel insurance yet you are going to struggle to protect yourself from coronavirus-related cancellations.

Several insurers including Churchill, Aviva, Admiral, Direct Line and LV have suspended sales of travel policies. “The moves by several of the UK’s biggest insurers underline unprecedented turmoil in the industry caused by the spiralling cost of dealing with travel problems caused by the outbreak,” says Rupert Jones in The Guardian.

Covid-19 is now a “known event”

If you do manage to buy a policy, be aware that you are still unlikely to be protected if you decide to cancel your trip due to coronavirus.

On 11 March the World Health Organisation (WHO) declared the coronavirus a pandemic. This makes ita “known event” in insurance terms and means policies bought after that date are unlikely to cover you for cancellation due to coronavirus.

The same goes for people who have annual travel-insurance policies. Several insurers told Moneysavingexpert.com that because coronavirus is a known event, “a new trip booked under an existing annual multi-trip policy ‘will not cover any cancellation claim in relation to coronavirus’”. Now is the time to get to know the small print on your travel insurance.