Whether it’s house, pet, life or car insurance, for years, we have relied on insurance policies to protect ourselves and our belongings and support us should unforeseen circumstances disrupt our lives in some way.
This includes the need to invest in travel insurance each time we go away as a way of ensuring financial support should something go wrong. In most cases, travel insurance policies protect individuals from circumstances such as:
- Injury, illness or in the worst case, death
- Flight or hotel cancellations
- Delays due to bad weather or other natural disasters
- Terrorist attacks
- Lost or stolen luggage
And in the case of 2020, travel insurance was crucial for so many who had their plans and holidays disrupted and even cancelled as a result of the Covid-19 outbreak.
Now, two years into the pandemic and with some way still to go, travelling has resumed but is fraught with much greater risks and uncertainty. As such, travel insurance has become an absolute must if you want to go away.
The problem is, insurance providers have had to adjust their policies to reflect the current climate that we live in. That’s why we’ve created this guide. Below, we’re going to take a look at six ways that the Covid-19 pandemic has impacted travel insurance.
Some companies have stopped selling travel insurance altogether
For companies that sell a variety of different insurance policies, it became easier to suspend or even stop selling travel insurance policies altogether. This is because these policies became costly, with lots of people having to cash in as their trip was cancelled last minute or they themselves fell ill with Covid-19.
Some of the UK’s biggest companies decided to press pause on travel insurance until they could get tailored and mutually beneficial policies in place. This gave them a chance to create Covid-specific policies.
That being said, some have not yet resumed their sale of travel insurance policies. Not only this, but some of those that have resumed selling have put one major change in place – they no longer cover any Covid-related claims.
Some new travel policies have much bigger restrictions
Following on from this, travel insurance providers that have continued to offer policies have imposed restrictions on future coverage, much like those that won’t cover Covid-related problems.
One of the biggest changes is that lots of policies offer restricted financial support for those wishing to visit certain destinations, typically those that have been flagged by the government or which have extremely high cases of Covid-19.
With the effects of the virus now known and better understood, it is considered a foreseen event. Therefore, travellers are seen to be taking a bigger risk and are not as eligible for as much support should they fall ill or have their trip cancelled.
That being said, in cases where travel is absolutely necessary (such as returning to your home country or attending a funeral), policies can be made a little bit more lenient as this is deemed essential travel.
’Cancel for any reason’ is a thing of the past
There was a time when travel insurance providers were confident that they wouldn’t have to pay out on too many of their policies, so many offered a ‘cancel for any reason’ clause. Of course, this did always cost a bit more but could be very useful and did prove popular amongst many travellers.
But now, with so many things that can go wrong as a result of Covid-19, this has been scrapped by insurance providers. They simply cannot offer this as an option knowing how many people are likely to cancel should they fall ill or even just become concerned about their health if Covid-19 cases begin to rise again.
This option may reappear in the future, but this remains unknown until the Covid crisis is under control and no longer a huge threat to the travel industry.
Accurate health declarations are more important than ever
In the past, it might have been tempting for travellers to tell a little white lie or be less transparent about the state of their health, feeling confident they won’t fall ill because of an existing condition. However, with Covid-19 able to seriously affect even healthy people, let alone those with breathing, heart or chronic conditions, this cannot happen in the future.
Policy providers will be able to refuse a payout to those who have not been honest about a pre-existing condition that has then become worsened in the case of Covid-19. This means they must do all they can to collect accurate and detailed health information from travellers before they depart.
And if you’re planning on buying travel insurance, it’s crucial to be aware of this and always be honest. Insurance providers are going to be more focused on these pre-existing conditions than ever before.
Policies have become more bespoke
As with everything that’s gone on during the Covid-19 pandemic (so far), there is no one size fits all solution. Countries and individuals have been impacted differently and have reacted to the pandemic in a number of ways – and travel insurance policies will be no different.
Insurance providers have found themselves having to create more bespoke policies not just tailored to Covid-19 but tailored to the individuals and their different circumstances.
For example, as we mentioned earlier, those taking part in non-essential travel might find themselves facing more expensive policies than those who are travelling for a valid reason. Each policy and situation must be carefully considered.
Travel insurance is more expensive
Last but certainly not least, and unsurprising to most, travel insurance policies have become more expensive in a lot of cases, especially for those with pre-existing health conditions that could be affected.
These prices may slowly decline again in the future, but for now, with the virus a real threat, insurance providers are having to pay out more than they ever have before. This has seen price hikes to match the risk levels and the number of claims being made.