Coronavirus continues to spread around the globe, putting business trips on hold and tempting holidaymakers to cancel their trips altogether. Many are turning to their travel insurance company to see whether they will be covered in the event of Coronavirus cancelling their trip.
GlobalData’s 2019 UK Consumer Survey finds that Spain, the US, France, Greece, and Italy are the most popular destinations among consumers purchasing travel insurance in the UK.
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Consumers are more likely to buy single-trip policies ahead of their trip, with 41.5% of respondents indicating this was the type of cover they bought in 2019. A holiday is the most common reason for travel, as cited by 86% of policyholders, while just 1.1% of respondents indicated that they were travelling for business purposes. Other reasons for travel include undertaking sports like scuba diving, special occasions such as weddings, and backpacking.
With Coronavirus hitting all of the popular destinations, fears of contacting the virus mounting, and many finding that their travel is non-essential, consumers are turning to insurers to clarify their options.
Travel insurance will provide cover for destinations where government agencies have warned against travel. For instance, the UK’s Foreign and Commonwealth Office (FCO) is currently advising against travel to China, Daegu, Cheongdo and Gyeongsan in South Korea, and several towns in the Italian region of Lombardy and one in Veneto. Provided that insurance is purchased before a region or country is added onto the list, consumers should be covered. In contrast, policyholders cancelling their trip to an area where the FCO has not advised against travel will not be covered. However, insurers are likely to change their policies should the government declare Coronavirus an epidemic or pandemic.
Meanwhile, in the US, travel insurance comparison sites have reported an uptick in sales of more expensive ‘cancel-for-any-reason’ (CFAR) travel policies. TravelInsurance.com registered an increase of roughly 150% in CFAR policies during January and February 2020 compared to a year prior.
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By GlobalDataMeanwhile, Squaremouth’s sales of CFAR policies are up by more than 100%. Upgrading from a standard policy to a CFAR one can increase the cost by up to 60%, yet restrictions apply on when and how a CFAR upgrade can be taken out and what it covers.
Travel concerns and individuals’ willingness to travel are unlikely to mitigate until Coronavirus is contained. Figures released by the World Health Organization indicate that Coronavirus has so far spread to more than 90 countries, with the number of cases now exceeding 100,000 and a death toll that keeps on rising. Travel insurers are likely to face a substantial number of claims made as a result of the Coronavirus crisis.
