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Will my insurer pay out if I cancel my holiday because of coronavirus?

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26/02/2020
Many people will understandably be concerned about how their upcoming travel plans will be affected by the coronavirus.

The government is updating its advice on travel abroad on a regular basis leaving many travellers confused about whether to go ahead with trips overseas.

For example, the Foreign and Commonwealth Office (FCO) is now advising against all but essential travel to certain cities in South Korea and northern Italy as well as all travel to China’s Hubei Province.

With new cases of coronavirus popping up across Europe, including France, Spain, Croatia and Switzerland, Brits may be considering cancelling their holiday plans.

But will their travel insurance reimburse them?

“Travel insurance will only step in when the country you are going to has been named by the FCO as somewhere you should not travel to at all, or where you should only travel if it is essential, and holidays are not essential,” says Brian Brown, consumer finance expert at Defaqto.

“In these circumstances your outcome will depend on your holiday plans – if you’ve booked through an ABTA or ATOL member, they will either attempt to find you an alternative holiday, or give you a refund. If you’ve made your own arrangements, it will be down to your travel insurer, or yourself to remedy the situation.

“If the FCO does not make a pronouncement about a country, then you have no grounds on which to cancel your travel plans, so no insurer – to our knowledge – will cover you for cancellation. The phrase used in policies is ‘disinclination to travel’ which is not covered.”

Here’s what the Association of British Insurers has to say on travel insurance implications:

If I ignore any government advice against all but essential travel, will my travel insurance still cover me?

If you travel against government advice then you are likely to invalidate your travel insurance. If unsure, speak to your travel insurer.

If I cancel my travel plans can I claim any cancellation costs on my travel insurance?

Travel insurance may cover non-refundable cancellation costs, in specific circumstances. These may include medical advice against you or a member of your group from travelling or government advice against travelling. Check your travel insurance policy for the scope of cover. Travel insurance is not designed to cover ‘disinclination to travel’ where the FCO advice has not changed against travel.

What would be classed as ‘essential’ travel?

You should check with your travel insurer if the reasons for your trip would or would not invalidate your travel insurance. A holiday to the area is unlikely to be considered as essential.

If I am in an area and the government advice is to return home, will my travel insurer cover any additional costs I incur in getting back to the UK?

Travel insurance policies may cover some out-of-pocket losses, and also help you to leave the area if a warning to return back to the UK comes into effect while you are there, if you are unable to get assistance from any other source. You should keep up-to-date with government advice.

Would any ATOL compensation arrangements operate here?

No. These relate to the failure of the providers of package holidays, and not for a major medical outbreak like coronavirus.

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