Travel insurers under ‘no legal obligation’ to refund customers for unused policies

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Due to lockdown measures and travel bans, would-be holidaymakers across the UK have seen a series of cancelled plans throughout last year. The new year has started with yet another lockdown, with airlines and holiday firms now axing plans once more.

However, for customers who bought their travel insurance well in advance, but have not yet made use of it, they may be left facing financial losses.

According to a legal expert, this is because travel insurance firms are under “no legal obligation” to offer refunds once their set-out “cooling off period” has come to an end.

Rip off Britain presenter Gloria Hunniford explored this idea on the BBC One programme, helping customers make sense of what options may be available to them in this situation.

Though travel insurance policy small print varies from brand-to-brand, most firms off what is known as a “cooling-off period”.

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This time frame allows customers to cancel their policy for some or all of their money back if they change their mind.

Speaking on the show, legal expert Gary Rycroft explained: “After the initial 14-day cooling-off period there is no legal right to have a refund on your insurance policy.

“Travel insurance policies have no consistency across the board so whether you end up with a refund will depend on your insurer and to some extend your own circumstances.”

The legal expert told Hunniford it is “important people understand there is no legal obligation on insurance companies to refund or pause policies when customers circumstances, or indeed global travel conditions change.”

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Customers may be able to cancel their policy and claim a pro-rata refund, however, Mr Rycroft warns they should be sure they won’t travel in the period covered by the policy.

“If there is a chance that you are still going to travel during the period that is covered by the policy then you’d want to keep it on so only if you’re absolutely sure you won’t be travelling should you think about asking for it to be cancelled and asking for a pro-rata refund,” he continued.

“If you have already made a claim on the policy you will not be entitled to a pro-rata refund.

“If you are absolutely certain that you don’t need it then go ahead and contact your insurance company and ask them for a pro-rata refund.

“What happens next is very much up to the goodwill on the part of the insurance company.”

Some travel insurance firms may offer a voucher for use towards a future policy, or allow customers a discount when purchasing their next annual policy.

These options, however, are at the discretion of the company and is not a legal obligation.

Though travel is likely to continue to experience disruptions as long as lockdown measures continue, the Government warns it is vital any potential traveller invests in an all-encompassing insurance policy.

“Wherever you’re travelling, getting the right travel insurance is one of the most important things to do before you go,” states

“It could save you and your family a lot of money and difficulty if things go wrong before or during your trip.

“Travel insurance policies are designed to provide cover for many eventualities, including medical expenses, a trip being cut short or cancelled, and loss or theft of possessions.”

It adds: “It is recommended to take out an insurance policy as soon as possible after booking your trip, to make sure you’re covered in the event of any changes before you depart.”

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