Beware these post-Covid travel insurance traps

Post-Covid-19 travel-insurance policies are riddled with exemptions, says Ruth Jackson-Kirby.

Praia do Camilo, Portugal © Getty Images
Watch your step: you may be not covered if you fall ill with Covid-19 abroad © Getty
(Image credit: Praia do Camilo, Portugal © Getty Images)

Lockdown is being eased and rumours of quarantine-free air bridges to allow trips abroad are circulating. But before you book your escape you need to check your travel insurance.

“Insurance companies are introducing so many exemptions that industry experts have expressed concern that thousands will go abroad without adequate cover,” says David Byers in The Times.

If you took out a travel insurance policy for a trip booked before 11 March, you should still be covered for cancellations relating to Covid-19. It was declared a pandemic on that date, so almost all policies taken out after 11 March, or trips booked using annual policies after that date, won’t be covered for any disruption associated with the virus.

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Times readers who have received renewal documents for their annual travel insurance “have been alarmed by the exemptions”. In one example, new policy wording from Insure and Go states it won’t cover “any claims caused by or relating to coronavirus disease”.

What’s more, “your policy will no longer cover you if the scheduled airline you booked becomes insolvent”. It goes on to say it won’t cover you if any company associated with your holiday goes bust.To make matters worse you could end up paying a lot more for these travel insurance policies that don’t cover what you need. “Holidaymakers will be forced to consider travelling without insurance this year because premiums are expected to soar when tourism resumes,” says Jessica Beard in The Telegraph.

So, if you are planning a trip what do you do? If you have an annual travel insurance policy speak to your insurer to check what is and isn’t covered. It is highly unlikely you’ll get cover for coronavirus disruption if you book a trip now.

Smaller players return to the market

Nonetheless, there are some small insurers who are starting to offer policies with Covid-19 cover. They include Trailfinders, Staysure, Cover For You, Cedar Tree and Outbacker.

When you are looking for a policy it is more important than ever that you don’t just opt for the cheapest premium. Make sure you are paying for a policy that will actually pay out if you need it.

One exclusion to be aware of with policies regarding corona cover relates to if, and when, you fall ill with the virus. Some policies cover you for emergency treatment and repatriation if you get Covid-19 while on holiday, but not if you contract it in Britain before you travel.

The number of insurers offering cover is expected to rise as lockdown eases. “Insurers are aware that travel insurance is important to raise consumer confidence in travelling,” a spokesperson for the Association of British Insurers told The Times. “More companies will be looking to come back onto the market, and many are still reviewing the extent of their cover.”

The travel industry has been hit hard by the Covid-19 lockdown and some may not survive. If you are booking anything to do with your trip, pay with your credit card: if a company collapses, you have Section 75 of the Consumer Credit Act as a last resort. This law states that if you have tried, and failed, to get a refund for a service that wasn’t delivered from the company involved, you can get your money back from your credit card provider instead.

Ruth Jackson-Kirby

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings and credit cards to pensions, property and pet insurance. 

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping among many other titles both online and offline.