The number of people buying travel insurance rose sharply last month, despite the fact that most policies won’t pay out if people cancel due to concerns around coronavirus.
According to the Association of British Insurers, cancellations will only be covered if the Foreign Office (FCO) advice changes to all but essential travel to a destination after booking. However, with growing concerns about coronavirus and uncertainty over whether the FCO may widen its advice to include additional countries or regions, insurance providers saw a surge in the sales of policies in February. Many of these policies are for trips much later in the year, as people rush to secure cover instead of leaving it to the last minute, which insurers say is often the case.
In February the Post Office saw a year on year rise in sales of policies of 168%, and CoverForYou saw a 150% increase, while comparison site TravelSupermarket said traffic to its insurance pages increased by 85% for the week of 24 February compared to the previous week.
Enquiries from existing customers relating to coronavirus have also increased. CoverForYou said that it has been receiving twice the number of daily enquiries, which has increased fourfold in the last week, since the coronavirus outbreak began.
Alpha has also seen a surge in both policy bookings and enquiries: “The main concerns are around changes to the FCO’s advice, whether they can still travel abroad and what holidaymakers should do if they are unable to return home from their trip,” says Rachel Conaghan, Alpha’s brand manager.
Alpha, which only provides travel insurance, has also noticed a shift in buying habits, with significantly more people booking through comparison sites, and booking much further in advance.
“On average, consumers on comparison sites tend to buy their travel insurance around two weeks before they are due to go on holiday. However, we have noticed that holidaymakers are purchasing cover for trips as much as three to six months in advance in preparation for summer. We always recommend that travellers take out a travel insurance policy as soon as their trip is booked to protect both themselves and their holiday from any unforeseen circumstances.”
In terms of the coronavirus, the FCO is currently only warning against all but essential travel to China, some parts of South Korea and the eleven villages in northern Italy that are on lockdown. Travellers will only be covered for cancellations where the FCO advises against all but essential travel, if they bought a policy before it was declared a no-go zone.
If people choose to travel to an area that the FCO has advised against, this would be classed as a known risk and would invalidate an insurance policy. However, if the advice changes while someone is away, insurers are likely to cover for travel curtailment. Under the normal terms of a travel insurance policy, travellers are also covered for medical expenses and repatriation should they contract the virus.
Source: Read Full Article