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We appear to have an unusual situation with travel policies and their response to the coronavirus. In general terms, the current advice is as follows.

For any travellers proceeding with travel plans, there is no coverage provided due to exclusions for pandemics or in some cases, known events. This is, of course, understandable because the Insurers consider the risk too high to cover.

However, with the exception of China, and in some cases, limited to specific areas within China, should a traveller decide to now cancel their travel plans to, say, Italy, because they accept the travel insurer©s expert opinion that it is financially too risky to travel currently, then there is likely no cover for nonrefundable cancellation costs.

I believe this is considered to be a disinclination to travel.

Might this be a Fair Trading Act breach? Any thoughts or ideas greatly received.

Reply: Crossley Gates

It is hard to respond to your query without specifics

However, I agree with your sentiment that underwriters can’t have it both ways.

As I see it, for people with an existing policy in place, albeit they haven’t started their journey yet, an underwriter can’t vary the terms of that policy without the insured’s agreement. So whether there is cover for loss of deposits will be governed by the policy’s existing terms, including its exclusions.

In relation to buying a policy now, the underwriter is, of course, free to decide whether to insure a journey or not, and if so, on what terms, like any insurance policy.

Reply: Pauline Davies

It seems that the insurers are aware of the conundrum. This came out yesterday from Allianz in relation to the policy sold by Helloworld Travel:

"The general exclusion for epidemic and government intervention took effect from 10am Friday February 28, 2020. However, we are not currently applying these general exclusions for medical and emergency medical transportation claims related to Covid-19.

“Although travel insurance policies generally exclude losses caused by events that were known or foreseeable at the time the policy is purchased, we are now considering valid medical and emergency transportation claims related to Covid-19 irrespective of when customers purchased their policy, when they depart on their journey and where they are travelling worldwide...We are offering customers directly impacted by Covid-19 the ability to amend the travel dates of their policy at no charge so they can assess their travel plans as the situation evolves."

June 2020

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