Poor communication by travel insurance companies means holidaymakers believe they have more protection against COVID-related disruption than is actually the case, according to Which?

The consumer champion said the use of blanket terms such as ‘COVID Cover’ and ‘Enhanced COVID Cover’ on insurers’ websites is leaving customers with a false impression about how much protection they have.

In a Which? survey of 2,800 travel insurers customers, conducted between February and March, around half thought they’d be covered if the Foreign Office (FCDO) warned against travel after they’d booked or if national or local lockdowns prevented them from travelling. Also, almost half thought they’d be protected if an airline or tour operator postponed their trip but would only offer a credit or rebooking but not a refund.

However, Which? said its survey of 73 insurance providers late last year revealed that cover for these eventualities – especially for when the FCDO travel advice changes – was ‘very rare’, with large discrepancies between what policies included.

Which? said it has continued to actively monitor 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, the Which? 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 prior to the pandemic. 

The consumer champion said some insurers only state the key benefits of their ‘Enhanced COVID Cover’ and are less clear about what is excluded.

Other insurers describe their policies as covering a ‘range’ of COVID-related scenarios and direct prospective customers to the FAQs for further details. 

What action has Which? taken

Which? has submitted evidence to the Department for Transport (DfT) ahead of today’s publication of the COVID Passenger Charter calling for travel insurance providers to be clear about COVID-cover terminology.

It believes insurers should present what is included and excluded in their COVID policies clearly on their websites and not bury exclusions in their FAQs.

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, it said. 

The FCA should also issue guidance to providers on the use of blanket terms such as ‘COVID Cover’ and ‘Enhanced COVID Cover’, which often overlook what kind of cover is not included – without qualifying them clearly, it added.

Which? is also urging the DfT to work closely with the Treasury and sector regulators including the FCA, Civil Aviation Authority and Competition and Markets Authority, as well as with industry, to ensure all travellers adequately understand their travel insurance cover and can access cover that protects them against FCDO advice related to the pandemic.