Travel insurance and your summer holiday abroad

Holidays abroad in the second summer of Covid-19 are a risky business made more uncertain by the surge of new infections in Europe. 

The choices of destination, accommodation, and transport are all made unpredictable by the pandemic and possible government responses in the UK and elsewhere.

Finding travel insurance that covers the risks of delayed flights, expensive quarantine, cancelled rooms and changes of venue is fraught with difficulty.

The problems are real. Thousands of travellers who lost their holidays last year because of cancellations and restrictions are still waiting for compensation. 

The first rule is to take out travel insurance as soon as you book your holiday. There are fewer options available this year and no completely comprehensive policies. Aviva, for example, is not offering any travel insurance policies currently; most other travel insurers have changed their terms and conditions to deal with pandemic risks. 

While governments have warned that foreign leisure trips may not be possible this summer, how can travellers who are still booking holidays protect themselves?
It is up to holidaymakers to check, before booking, that they are permitted to leave the UK and their chosen destination is allowing travellers from the UK. 

They should also establish whether their holiday company or airline will allow booking changes if the holiday cannot be taken because of pandemic rules. 

Package holiday groups and carriers are required to make refunds or allow rebooking if a holiday is cancelled due to government action.

As tour operator Tui says on its website: “Please be assured that if your holiday is impacted, we’ll be in touch with you directly to discuss your options, which will include the opportunity to change your booking for free or cancel and receive a full refund within 14 days.”

The UK Competition and Markets Authority has ruled that if you do not get the service you have booked you should receive a refund and has threatened to take companies to court if they don’t volunteer refunds in a timely manner. 

The CMA has pressed holiday let companies, which were initially reluctant to offer refunds, to do so — or risk court action. Rail, coach and ferry companies should also offer refunds.

If you have paid by credit card you can reclaim the cost of the holiday under the Consumer Credit Act. You may also be able to have the cost refunded under the chargeback scheme operated by debit cards, but this is not a legal right.

Can insurance protect me from the effects of a travel ban?
In principle, insurers are unlikely to pay out if the risks of cancellation are known at the time you book. As the Association of British Insurers points out — travel insurance is intended to cover “risks unforeseen when you take out the policy”. The ABI says: “Travel policies taken out after the pandemic was declared are likely to contain some exclusions for cancellation cover.”

However, some insurance policies provide cover if the company goes out of business.

Rory Boland, Which? travel editor, says: “Combining travel insurance with the flexible booking policy from a good tour operator is the best way to secure the most cover for the different types of disruption that may occur this summer, such as local and national lockdowns.”

Can I insure myself against the risk or me or my party members falling ill and having to cancel?
Travel insurance should provide cover against the risk of you or one of your fellow travellers falling ill with Covid and being unable to travel. However you get what you pay for: some policies will only cover for cancellation if you are diagnosed with Covid, but not if you are told to self-isolate without having tested positive. Special policies may be needed for older travellers.

Can I insure myself against the costs of tests, quarantine etc?
It is unlikely that these costs can be covered but will have to be budgeted for as they are already in use in many countries and so are a known risk.

Is the European Health Insurance Card still valid?
EHIC cards are valid until they expire. The replacement Global Health Insurance Card is available via the NHS website. These cards entitle UK nationals living in the UK to the same medical treatment as a local citizen in any EU country.

What if there is an existing medical condition?
The terms and conditions of a travel policy should list the conditions that it accepts without extra charges. Resolver.com, the online complaints site, says pre-existing medical conditions must be disclosed.

What happens if there is a dispute with the insurer?
Many insurers have run into arguments with customers during the pandemic. The Financial Ombudsman Service reported that from 1 April 2020 to the end of December 2020 it received just over 6,000 travel insurance complaints, compared to almost 2,000 complaints in the same period of 2019. Many cases involved consumers asking for a refunds for policies that they did not use.

Customers must read the policy terms and conditions, even if they often run to more than 20 pages.

Lindsay Cook is the co-author of “Money Fight Club: Saving Money One Punch at a Time”, published by Harriman House. If you have a problem for the Money Mentor to look into, email money.mentor@ft.com