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A fifth of Brits (21%) heading abroad in 2018 travelled without travel insurance, according to an ABTA survey in May 2019, despite the financial ramifications of an illness, injury or worse being significant19. This situation is by no means unusual but could Brexit and Thomas Cook’s recent high-profile insolvency finally persuade UK holidaymakers that the risks are not worth taking?
Many British travellers to Europe may well have been over-reliant on their European Health Insurance Card (EHIC), believing it would pick up the cost of any required medical treatment whilst abroad. The reality is that the EHIC by no means covers everything and is only valid in certain countries. It also has a five-year lifespan, so unless it is current, it is of no use.
With full departure from the EU looming, nobody is too sure what will happen with regard to the reciprocal health arrangements that underpin the EHIC system. Martin Ashfield, board member of the CII’s Society of Claims Professionals has said, “If the UK leaves without a deal, UK citizens cannot rely on the EHIC being valid.”20 Experts say the situation will entirely depend on negotiations between the UK and EU member states.
For those travellers that do buy travel insurance, post-Brexit travel may require a closer examination of the small print. The CII is warning that extra security checks at ferry ports or airports, could lead to lengthy delays, long enough to cause missed departure. Insured policyholders would be well-advised to check whether their policy would cover them, offering compensation for missed departure and delayed travel due to such security checks.
UK travellers are being advised that they need at least six months left on their passport before its expiry date, in order to travel to other countries. Those heading off on motoring holidays are urged to get a Green Card and apply a GB sticker to their vehicle.
But when it comes to safeguarding against the insolvency of a travel company, airline or agent through whom you have booked a trip, there is more work to do. Thomas Cook has been joined by names such as Zoom, XL.com, Monarch Airlines, Libra Holidays and several more operators in recent times, yet many popular travel insurance policies do not cover insolvency.
Package holidays are typically protected through the ATOL licence of the travel firm arranging them, which means those travelling can continue with their holiday, if their travel provider collapses, and be brought back to the UK. However, around 15% of Brits now travel independently21 which rises to 60% of over-65s22. These travellers are not typically covered for operator insolvency, as policies tend to be written for specified risks and not all risks.
If you are travelling independently, it pays to examine your policy’s small print and see if the cover includes Scheduled Airline Failure Insurance (SAFI). If it does not, it may be possible to ask to pay for an add-on that provides this cover.
Good advice, as always is to pay for your travel arrangements with a credit card, gaining some protection under the Consumer Credit Directive 2011.
With the cost of travel insurance predicted to rocket post-Brexit, we may come to see the demise of the ‘packaged’ travel insurance product, bought off the shelf. Travellers used to creating their own trips, may be more persuaded to do what already makes sense – working with a broker to fashion travel insurance cover that suits their individual trip and circumstances. Having SAFI built into this, along with cover for delays and missed departures, and having a broker ensure there are no holes in the medical protection overseas, could be the keen traveller’s best policy
1https://who.maps.arcgis.com/apps/opsdashboard/index.html#/c88e37cfc43b4ed3baf977d77e4a0667
2https://www.bbc.co.uk/news/business-51439400
4https://www.ft.com/content/3c179494-49c6-11ea-aeb3-955839e06441
5https://www.statista.com/statistics/515789/chinese-tourist-visits-to-the-united-kingdom-uk/
6https://www.bbc.co.uk/news/world-51318246
8https://www.theguardian.com/world/2020/feb/05/coronavirus-global-economy
10 https://www.mdd.com/forensic-accounting-articles/non-damage-business-interruption/
12 https://www.ceca.co.uk/ceca-pi-insurance-will-be-a-major-challenge-for-contractors-in-2020/
16https://www.law.ox.ac.uk/sites/files/oxlaw/41_david_pryce_slides.pdf
17https://www.fscs.org.uk/what-we-cover/insurance/
18https://www.fscs.org.uk/about-us/brexit/
22https://www.avantitravelinsurance.co.uk/mature-travel-trends
23https://youtalk-insurance.com/news/allianz-insurance-plc/allianz-reveals-its-unusual-claims-for-2019
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