Travel insurers need to provide greater clarity in messaging
A report from product comparison site Which? this week found that just two out of more than 250 travel insurance policies offered comprehensive ‘Covid cover’.
The last 18 months have seen unprecedented disruption to the travel and tourism sector, with guidelines, quarantine rules and restrictions frequently changing. The pandemic has put equal strain on travel insurers, with late cancellations and ill-health of travellers putting paid to holiday plans and increasing claims.
The latest findings come in the midst of the Government’s ‘traffic light’ system, but it is an issue that has been present since the pandemic started.
“The insurance industry's reputation has suffered in relation to the impact of Covid-19 and Business Interruption Insurance, which led to a fast-track test case in the UK in front of the Supreme Court in January,” Dr Krummaker said.
“This particular case was also about unclear policy wording for contracts that included disease clauses and the room it left for interpretation. This seems to be the case here again, with regulators pressing the insurance industry for clear wording to making inclusions and exclusions of their policy clear, transparent and easily understandable for travellers.”
With uncertainty likely to be prolonged into the coming months, Dr Krummaker called for clearer dialogue.
““It is in both the policyholder’s and insurer’s interests to check their policies offer clearly-worded statements about what is and isn’t covered with regards to various Covid scenarios that a traveller may face. This would allow insurance buyers to make a fully-informed decision.
“They should be particularly attentive to where a customer is planning to travel and the latest information about the risk in that country or region, factoring in any likely changes to Government guidance in that time as well.
“However, I believe insurers are already, rightly, very cautious when it comes travel insurance because they can easily become victims of attempted fraud.
“My advice for insurance buyers in any line of business is to always to read the documentation and terms carefully in advance, and check several different providers to verify standard conditions and pricing.
“If in doubt, ask a broker, financial advisor or service hotline for clarification – and ask for confirmation in writing – before purchasing insurance.”