Insurance and COVID- 19 – How does it affect you?

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The insurance industry is one of many to be struggling at this difficult and unprecedented time.

Lockdown has seen businesses close across Europe, people instructed to stay at home and social distancing is the new norm. The upside for the insurance industry is fewer vehicles on the road and in all probability fewer accidents.

Business Insurance

Business owners are finding themselves rummaging through a mountain of documents to locate their own insurance policy in the hope that they can find a solution.

Many business owners are finding that their policies are not covering shutdowns due to Coronavirus and are left with premises and businesses they can’t access or trade.

Travel Insurance

Travel Insurance policies are being scrutinised by both insurers and those who have bought cover.

“The Foreign & Commonwealth Office (FCO) has advised against all non-essential international travel, initially for a period of 30 days”.

Since the government have advised against travel, anyone due to travel in the next 30 days should be able to receive a refund, rebook for a later date or make a claim from their insurance provider. If you have a trip booked outside of the 30-day window, this booking is still valid. Therefore, it is unlikely that a cancellation or amendment will be free of charge unless the airline has amended its policy.

How have Travel Insurance Companies Reacted?

Some insurance companies have stopped selling new policies, or altered cover, in the wake of the COVID- 19 outbreak.

Axa, Aviva and InsureAndGo have limited or changed cover for claims relating to the disease. This may mean that a trip booked now may not cover you for disruption, even if you have a valid annual travel insurance policy.

Admiral, Aviva, LV, Churchill, More Than, and Direct Line have suspended travel insurance sales completely for the moment. The Post Office has also suspended selling travel insurance to new customers.

The Association of British Insurers have said that travel insurance is for unforeseen circumstances and coronavirus no longer meets that criteria. Essentially, Coronavirus is off the travel insurance menu.

What are your Travel Rights?

Insurers and airlines normally follow official UK foreign travel advice and if you go against this advice, you risk invalidating your insurance policy.

Your rights also vary from airline to airline so check your policy and the terms and conditions of your booking.

If the advice is against all but essential travel and your trip is essential some insurers may still maintain cover.

Your rights can also depend on your choice of airline and again the small print of your insurance policy is important - so do read it carefully.

Frequent Questions

- Can I get my money back from cancelled flights?

Yes in most cases you should or the option to rebook for another date.

- What if I cancel the flight?

If there are no travel restrictions then In all likelihood you will lose your money unless your travel insurance covers it or the airline has amended their policy.

- What if I just don’t turn up?

You lose the flight and your money unless you have extenuating circumstances that the airline will accept. Many flight bookings are non-refundable

- What about the holiday I have booked? Should I stay or should I go now? (The Clash for those of that era)

If there are no restrictions by the FCO, the airline or holiday provider and the holiday goes ahead, you go ahead. If you don’t and there are no restrictions on travel you will lose the holiday and your money, unless your travel insurance covers it.

Many travel companies have taken to social media to ask customers to only get in contact when your trip is within the next 7-14 days, this allows more urgent enquiries to be handled.

Life Insurance

Unfortunately, life insurance is also under review by both insurers and those who have purchased policies. Given the global fatality rate, it is essential that you check your life insurance policies.

Critical Illness Insurance

Critical illness insurance is also impacted, does COVID- 19 fall under your critical illness policy if you are incapacitated for a lengthy period of time? Probably not in name but may be listed under contracting a disease or illness. Check your policy and with your provider or broker.

The last thing you want to be worried about, is you and your family’s financial future on the back of this pandemic.

Many people reviewing their policies will be concerned about the level of cover they have taken out, some will have bought policies in good faith that they are covered for all eventualities. The frequent and much used comment of:

“Insurers always look for the reason not to pay as opposed to the reason to pay”

will continue for some time as people scrutinise their policies and their providers. Trust in the Insurance industry is now at a premium and in the balance.

Back to Coronavirus - A Health and Economic Emergency

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