Research by Which? suggests that many travel insurance customers are being left with a false impression about the level of protection they would benefit from if the pandemic was to impact on their holiday plans.

Which? says some of this is down to poor communication by travel insurance providers and the use of often confusing, blanket terms such as ‘Covid Cover’ or ‘Enhanced Covid Cover’ on insurers’ websites.

The research has been published on the day international travel re-starts, with thousands of holidaymakers jetting off to green list countries.

Are you covered for Covid disruption?

Which?’s survey of more than 2,800 travel insurance customers, conducted between February and March 2021, found that three in 10 (29%) respondents had committed to bookings or arrangements for international trips this year. About one in 10 (12%) people said that while they’d not booked or arranged travel, they had specific plans.

Which? asked the survey respondents if they believed that their policies would cover them in the following six scenarios:

• Cover for costs if – after booking a trip – the Foreign, Commonwealth and Development Office (FCDO) advised against travel to the destination
• Cover in the event that a local or national lockdown prevented travel
• Cover in the event that an individual couldn’t travel because they had to self-isolate at home because of NHS Test and Trace
• Cover in the event of testing positive for Covid-19 and so being unable to travel
• Medical cover if the policyholder contracted Covid-19 overseas
• Cover if the airline or holiday company postponed travel but only offered rebooking or a credit note, not a cash refund

Half (50%) of survey respondents believed they’d be covered should the government’s travel advice change after a trip was booked. Nearly half (47%) thought their policy would cover them in the event that local or national lockdowns prevented them from travelling.

Almost half (46%) believed their policy would cover them if their airline or holiday company postponed their travel, but wouldn’t offer a cash refund.

Large discrepancies between policies

However, when Which? analysed 73 travel insurance providers between October and November 2020, cover for those three such eventualities was very rare, with large discrepancies between what policies included.

The consumer champion has been monitoring Covid-related cover offered and believes little has changed to improve this situation in recent months.

Since March 2020, most insurers have considered the pandemic a ‘known event’, and excluded FCDO cancellation cover from new policies and for newly booked trips. However, Which?’s survey found that customers with policies bought after March 2020 were more likely to believe that they were covered for this type of disruption than ones that had bought policies before then.

For instance, two thirds (65%) of respondents that had bought travel insurance less than six months prior to participating in the survey believed that they would be covered if FCDO travel advice changed and advised against travel after they had booked their trip.

While some insurers give upfront information about their Covid-19 cover, some providers only stated key benefits that their ‘Enhanced Covid Cover’ provided, but were less clear about exclusions.

Other providers described their policies as covering a ‘range’ of Covid-related scenarios, and directed prospective customers to the FAQs for further detail.

Confusing terminology

Which? is calling for travel insurance providers to be clear about Covid-cover terminology. It says insurers should present what is included and excluded in their Covid policies clearly on their websites, and not bury exclusions in their FAQs.

It says the Financial Conduct Authority (FCA) should be monitoring terminology used by travel insurers in their Covid-19 policies and marketing material to ensure they provide sufficient clarity.

Which? also says the FCA should also issue guidance to providers on the use of blanket terms such as ‘Covid Cover’ and ‘Enhanced Covid Cover’. Doing so would help consumers to make a much more informed choice when booking a trip abroad, and could save them money.

Jenny Ross, Which? Money editor, said: “The ongoing threat of Covid-related disruption means that  getting the right travel insurance for your holiday is more important than ever.

“Without closer scrutiny from government and regulators of how clearly insurers present their policies, there is a very real chance that many travellers will be left out of pocket yet again this summer.”