From travel insurance to refunds, the experts have the answers (Picture: Getty Images)
Despite rumours of vaccine passports and an apparently ‘irreversible’ reopening of UK attractions and hotels on the cards, this year’s holiday season – at home and abroad – still looks hugely uncertain.
This means that getting the right travel insurance, booking with reputable holiday providers and understanding how to reclaim for cancelled plans is more important than ever, especially since many insurers have removed cover that would have protected holiday payments against Covid cancellations.
Figures from the financial ombudsman – which deals with consumer complaints about travel insurance – show that complaints about the products have risen massively since the pandemic started, while more of these complaints than before are being upheld, suggesting that insurers are not always acting fairly.
Brian Brown, consumer finance expert at financial product rating expert Defaqto, says that policies have changed as well, so buyers need to be wary.
‘Insurers have altered their policies to specifically deal with Covid problems, either to give cover for things like cancellation due to catching Covid, or to exclude those claims. Customers need to pay close attention when buying insurance cover to see what Covid-19 cover their policy gives them,’ he says.
Booking a holiday in a pandemic requires a different attitude towards your travel plans to ensure you don’t end up out of pocket.
Here, our experts answer frequently asked questions about how to book safely in the current circumstances.
I can’t go on holiday because of coronavirus restrictions in the place I’m travelling to. Can I get my money back?
All travel insurance policies are different, but if you booked the holiday before the pandemic became a ‘known event’ (unlikely by this point since this was in the early months of 2020), then your travel insurer is unlikely to pay out, says Charles Offord, managing director of Co-op Insurance.
He suggests contacting your travel provider, especially if they have a Covid-19 guarantee in place.
‘Contact your travel providers – airline, tour operator, travel agent, etc. – in the first instance to seek a refund; as many are currently offering Covid money-back guarantees,’ he says.
I can’t go on holiday because the country I want to visit is now on a ‘Red List’. Who pays out?
If the Foreign, Commonwealth and Development Office (FCDO) changes its advice about whether you can travel to a country, this can, in some cases, trigger the ability to claim on insurance.
However, Brian Brown, at Defaqto, says that most insurers have changed their policies since the pandemic, so that if a country goes on the ‘Red List’ you won’t be covered for cancelling.
‘Before the pandemic around half of insurers would have paid claims for cancellation due to the FCDO changing its advice and telling you not to travel to a destination.
‘Now, almost every policy excludes these claims,’ he says. So check your policy first, but the likelihood is you won’t be covered and can only seek redress from your travel provider.
If your flight or booking is cancelled, contact your airline or holiday company first (Picture : Getty Images)
If I need to reclaim money for a cancelled trip, should I ask my insurer first, or the airline or holiday company?
You should always contact the holiday company or airline you booked with first, says Antony Martin, managing director at InsureFor.com.
‘If a consumer buys a holiday and then it is cancelled by the holiday company, the customer should approach them first for a refund.
‘If the holiday company or airline cannot offer a refund, that’s when a claim can be made through the travel insurance company.’
I’ve only been offered a credit note or voucher, and I wanted my money back. What can I do?
This depends on the type of holiday you have booked. You have specific rights if you book flights with an airline or a package holiday. In these cases you can push for a full refund.
It’s less clear-cut in other cases, such as if you’ve booked aspects of your holiday separately. The Competition and Markets Authority (CMA) has stepped in to give guidance on whether refunds must be given, but this is guidance not law.
Head of the CMA’s Covid-19 Taskforce Will Hayter says: ‘Our view is that consumers will generally be entitled to a refund when they have paid in advance for services or goods that cannot be provided because of legal restrictions as a result of the pandemic.’
If you are given a credit note or voucher by a company that is ATOL-protected, there is currently some protection from the Government if the firm goes bust.
This protection only applies to those vouchers issued before April 30 however, so you will need to check whether this has been extended.
Jane Hawkes, consumer travel expert at ladyjaney.co.uk, has a warning about accepting other types of vouchers.
‘It is worth remembering that vouchers do not have the same protection as refund credit notes so if you are in doubt then it would be prudent to contact your insurer before accepting them. ‘
Case study: ‘I feel lucky, but I’ll be more cautious in future’
Vicky was lucky to get most of her money back on her honeymoon booking (Picture: Donna Ford)
Vicky Shilling, from Dublin, had to cancel her postponed honeymoon to Europe, which she had booked in several different parts, when Covid struck.
‘We married two years ago, and I wanted to get my wellbeing business coaching business off the ground before we went,’ she says. ‘We’d planned a trip to taste wine in Spain and Portugal.
‘When we saw something we liked, I clicked “book it” and didn’t think about cancellation policies or anything like that.’
Vicky says cancelling was very easy in most cases, although she lost £99 on one hotel booking, but that the whole process has made her more wary about rights.
‘I’m definitely more likely to be careful and check for loopholes. We didn’t have any insurance to claim on if we hadn’t been given refunds. I’d make sure I was clear on all policies in the future.’
What happens if I have a positive coronavirus test or am asked to isolate and so can’t travel?
Unless your airline or holiday provider has its own specific policy on this, they are unlikely to refund you. Instead, you will have to rely on your insurance provider, and policies vary widely.
‘Around three-quarters of travel insurers will pay if cancellation is due to the customer having a positive Covid test before travelling, while one in three
will pay if the cancellation is due to being told to self-isolate by the NHS,’ says Brian Brown at Defaqto.
‘Only 16 % of insurers will pay for the extra costs of extended stay overseas due to being denied boarding after catching Covid-19.’
Some insurance policies will cover you if you are told to isolate by NHS Test & Trace, but this is no means certain in every case – so you will have to check the small print.
What happens if I become sick with Covid-19 while on holiday?
One of the most important reasons for taking out travel insurance is that medical expenses can run into many hundreds of thousands if you do get sick abroad. Most insurance policies will cover you for health expenses if you catch COVID-19 abroad, says Brian at Defaqto.
However, a worrying 3% will not, leaving travellers very exposed.
Q. I’m only going on holiday in the UK. Do I need to have insurance?
Yes, says Antony Martin at InsureFor.com, and it needs to have specific Covid cover to protect against ‘cancellation and curtailment’.
He warns: ‘The accommodation should offer a refund or the opportunity to visit at a later date but this depends on their booking policy.
‘Our travel insurance product protects consumers against Covid-related issues both pre-departure and during their stay to ensure they don’t lose out if their UK holiday is cancelled.
‘It is also important to take out travel insurance for a staycation under normal circumstances to cover various issues such as cancellation, curtailment in case the holidaymaker has to cut their staycation short, transport delays, lost or stolen luggage and personal liability to cover legal expenses if they’re held responsible for causing damages or injury to another person while on holiday.’
What should I look out for in my travel insurance/holiday provider, when booking this summer?
Specific guarantees to refund holidays in cash, for Covid cancellation, are being offered by many firms, which can give some peace of mind.
However, these guarantees are only as strong as the firms that underwrite them, and if a company goes bust you may not be covered.
To avoid this, read the small print carefully. Charles Offord, at the Co-op, points out that if you pay with a credit card you get extra protection for your holiday – since if the firm goes bust the card provider is ‘joint and severally liable’ for the debt and will repay you.
Similarly, when taking out a travel insurance policy, read through carefully for exclusions related to Covid-19, suggests Adam Edinburgh, head of commercial at insurance provider Holiday Extras.
He says: ‘If in doubt, people should contact their insurer and seek clarity on what is and what isn’t included in their cover.’
I’m not happy with what my insurer or travel provider offered after my holiday was cancelled. What can I do?
In the case of a travel insurer you can complain to the Financial Ombudsman – see their website at financial-ombudsman.org.uk – once you have exhausted the insurer’s own complaints process.
Their decision is binding on the insurer and the process will cost you nothing.
The most recent figures available show that almost 40% of travel insurance complaints were upheld in favour of customers, so you have a good chance of getting a decision overturned.
If your complaint is against a travel agency or provider that is a member of ABTA (the Association of British Travel Agents), there is help to file a dispute at abta.com.
If your dispute is with an airline, you may be able to use an Alternative Dispute Resolution (ADR) provider to take your case forward.
Different airlines use different providers, but there is a list of which airline uses which ADR on the Civil Aviation Authority website. There is also more information on the complaints processes available at caa.co.uk.
If your provider is not a member of any of these organisations, you can contact Citizens Advice (0808 223 1133) for more help, and can also report them on coronavirus-business-complaint.service.gov.uk if you believe they are breaking the law by providing vouchers rather than cash refunds.
If you have no help anywhere else it is possible to take a provider to the small claims court – see Citizens Advice page on it here. This can be an expensive business and can take a long time, however.
Case Study: ‘I will use a private travel agent next time for the peace of mind’
Mum of two Mrinalini spent eight months trying to get her money back for a cancelled trip (Picture: Mrinalini Raman)
Mrinalini Raman, from Hertfordshire, had booked flights to India for her family for April last year, and a trip to the US for summer 2020.
‘The US flights were easy to cancel, but I’d booked the India flights through Expedia,’ she explains. ‘It took eight months to get the money back in bits
The mum of two, who runs party business party-genie.com, says that looking back on it, she realises the industry was struggling with a new situation and call centre staff were not sure what advice to give.
‘Next time I book I’m planning to use a private travel agent because I know they are very good about refunding and it feels safer. The price might be a bit higher but it is worth it for peace of mind.’
Expedia’s refund process states that because of Covid-19 it can take up to 12 weeks for customers to be refunded.
‘Some refunds could take a bit longer, depending on the airline,’ the online travel agent states.
In short, in this unprecedented period, the way we book holidays needs to be different, too.
Reading the small print, taking out more comprehensive insurance and understanding the different compensation rules surrounding different types of holiday could prevent a stressful process if things don’t go to plan this year.