Which? has called on the UK’s financial regulator to investigate the travel insurance market before travel resumes after the Covid-19 pandemic.
It claims no travel insurer is providing complete cover for Covid-19 and related disruption for customers travelling abroad.
And said a study into 73 policies has found insurers are reducing cover that would have been available prior to March 2020 while raising prices
Which? said it believes it “can not be justified for insurance providers to drastically reduce cover across the market, while at the same time increasing prices”.
It added: “This is out of step with the Financial Conduct Authority’s expectations on firms in relation to cover impacted by coronavirus, and it raises a significant question around the value of travel insurance products today.
“Ahead of a likely return to some form of large-scale international travel next year, Which? is calling for the regulator to investigate the travel insurance market.”
Which looked into whether policies available provide cover in four different scenarios:
- If the policy holder gets COVID-19 abroad and requires treatment;
- If they contract it ahead of their trip and have to cancel;
- If they are exposed to the virus or have shown symptoms, but don’t have a positive test or diagnosis, and are self-isolating and have to cancel;
- If wider disruption resulting from the pandemic, such as changes in official rules and advice, forces them to abandon travel.
All 73 providers covered emergency medical claims and costs for emergency medical repatriation if the policy holder becomes ill with COVID-19 on holiday.
However, 17 insurers offer nothing beyond this, and were classed by Which? as having a ‘basic’ cover rating.
A further 43 offered cancellation cover for if the policy holder tested positive and had to cancel ahead of travel and were give a ‘low’ Covid cover rating.
Just 13 provided cover for cancellation cover due to self-isolation, in addition to standard cancellation and medical cover, qualifying for Which?’s ‘superior’ rating.
However not a single insurer was judged by Which? to offer ‘complete’ cover requiring customers to be able to claim in the event of cancellation caused by Foreign and Commonwealth Office (FCDO) advice changes as well as government lockdowns.
Jenny Ross, Which? Money editor, said: “Coronavirus has had a seismic impact on the travel insurance market and our research shows that consumers are facing the double whammy of significantly reduced cover and increased prices.
“While it’s still unclear how soon holidaymakers will return to the types of trips that took place before the pandemic, it’s vital that when they do comprehensive cover is available at a decent price if things go wrong.
“If not, the travel industry will not be able to rebuild confidence that it lost at the start of the pandemic. The FCA should act now rather than later to ensure that consumers will be protected on future trips, and that insurers are treating customers fairly.”