Insurers refuse claims amid travel chaos as consumer groups call on industry bosses to do more to help hard-hit customers
- Travel insurers could refuse to reimburse customers for holiday payments
- Companies are using small print to deny claims related to Covid cancellations
- Unused accommodation, car hire and excursions may not be covered
Holidaymakers could be left thousands of pounds out of pocket because insurers will not cover claims for the current travel chaos.
Since the disruption is now a ‘known event’ from media reports, travel insurers may refuse to reimburse customers for money wasted on unused accommodation, car hire and excursions.
Others are relying on Covid-related exclusions in the small print to deny claims.
Martyn James, from complaints website Resolver, said: ‘Just because we know Covid is prevalent does not mean we can treat flight disruption as a given. Insurers cannot absolve themselves of responsibility.’
With experts warning the recent travel chaos could continue for months, it means holidaymakers now face a minefield when purchasing cover for summer trips abroad.
Under UK law, airlines are required to refund customers for cancelled flights or offer an alternative trip.
Passengers may also be entitled to compensation payments of up to £520 for delayed or cancelled flights to or from a European destination.
Insurance companies could deny payouts for holidays cancelled over Covid because it is now classified as an ‘known event’ in the small print of some insurance plans
But there is no obligation for travel companies to reimburse holidaymakers for additional costs incurred as a result of the disruption.
This means travellers who have paid for hotels, car hire and missed day trips face losing thousands of pounds if insurers refuse to cover their losses.
And because insurance is designed to cover unforeseen events, holidaymakers who purchase cover now could find any future claims are denied.
One major insurer, Admiral, said British Airways and EasyJet flight cancellations became a ‘known event’ on April 4 after they were reported in the national press.
The firm added that customers would not be covered for disruption anyway as its policies include a ‘coronavirus general exclusion’.
So because airlines have cancelled flights due to staff being sick with the virus, they would not be entitled to a payout.
Another provider said insurance was not there to cover losses caused by airlines failing to meet their obligations.
Tim Riley, managing director of True Traveller, said: ‘If they [the customer] booked their flights, accommodation, car hire all separately then if their flight is cancelled and there is no replacement, they will incur the relevant charges on the other travel arrangements.’
Virgin Money added that it would also not cover claims arising as a result of airlines cancelling flights.
However, other insurers including Aviva, and LV= said they do not currently consider these cancellations a ‘known event’.
Zurich said the same – unless the passenger already knew their flight would be impacted at the time of booking.
Experts last night urged the travel insurance industry to do more to reassure and help customers caught up in the chaos.
A spokesman for trade body Association of British Insurers said: ‘If your travel insurance policy includes cover for travel disruption then costs that you might incur as a result of travel delays or cancellations should be included.
‘In the first instance, refunds should be sought from the airline, accommodation provider or tour operator, or the provider of any other service such as hire cars, and any bookings made through a credit card may also have recoverable costs.
‘If unsure, check with your travel insurer to see what you’re covered for.’