Ease in Travel Restrictions Prompts Regulatory Reminder

As the UK government looks to enhance the ability for holiday travel this summer the country’s financial services regulator has updated its advice to travel insurers.

While Greece has extended its ban on UK travellers for the further two weeks a number of European countries are set to enter into agreements that will allow UK holidaymakers to travel from next week without the need for a period of quarantine on their return.

The Financial Conduct Authority (FCA) has warned travel insurers that they needed to ensure they informed clients what would and would not be covered given the ongoing COVID pandemic.

“There is currently a lot of consumer demand alongside fast-moving changes to risk, especially in the travel insurance market,” it said. “Firms must ensure that they continue to treat their customers fairly during the whole product cycle of purchase, claim and renewal. 

“We expect firms to communicate clearly to both new and existing customers the cover provided under their policy and any policy exclusions that may impact the cover under each section of cover resulting from coronavirus.”

The FCA said when selling an insurance policy, firms are required to only propose cover that is “consistent with a customers’ demands and needs”. 

“When selling travel insurance, we expect firms to ask customers questions to establish an individual customers’ demands and match the products they are offered to these.”

If a customer had bought an annual travel insurance to cover the risk of cancellation or curtailment and was now relying on a policy renewal to cover travel arrangements made before the coronavirus situation escalated, the FCA said firms needed to consider each claim on its merits.

“If the claim arises after the renewal date, we would expect insurers to treat customers fairly, taking individual circumstances into account,” it added. “This includes where the policyholder was given a reasonable expectation that cover would continue. Where appropriate, we expect insurers to renew or consider claims under the terms of the original policy for these travel arrangements.”

In terms of claims the regulators said insurers need to provide “reasonable guidance” to help a policyholder make a claim, not unreasonably rejecting a claim, and settling claims promptly. 

“Insurers will also understand that the coronavirus pandemic is a stressful time for some customers and we expect them to take this into account when dealing with claims,” it added.

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