Insurance giant LV has stopped selling travel insurance due to coronavirus, in a move described by one expert as ‘alarming’.
In a message on its website, the company said it was ‘unable to give’ new customers travel insurance ‘at the moment’, and said it had ‘made the difficult decision to pause the sale of travel insurance to new customers.’
It added it had considered ‘excluding cover or increasing prices for new customers’, but described prioritising customers who had already bought insurance as ‘the right decision’.
LV has stopped selling travel insurance to new customers due to coronavirus
It said in a follow up statement: ‘In the last couple of weeks, we’ve seen the number of policies sold double.
‘Whilst LV is a major motor and home insurer, we are a small travel insurance provider and it’s important for the long-term benefit of all our customers that our exposure to this market remains at a sustainable level for the overall business.’
Existing policyholders will see no change, but it gave no indication as to when it would begin selling travel insurance again, despite describing the move as ‘temporary’.
Gareth Shaw, head of money at consumer group Which?, said: ‘It’s very alarming that LV have withdrawn the sale of travel insurance and that other providers have also started restricting the policies they offer customers.’
Aviva has also stopped selling travel disruption cover, an add-on which would covers some delayed flights.
‘Anyone planning a holiday should get insurance as soon as they book’, he added.
‘If you haven’t already booked insurance and are travelling soon we urge you to get cover immediately from a reputable insurer.
‘The Government, insurers and the travel industry must immediately tackle the huge challenge provided by coronavirus, as the industry depends on people having the confidence that they can travel with the knowledge that they will be covered’.
Earlier in the week, comparison website Go Compare said policy sales had risen 170 per cent since the coronavirus outbreak.
Some flights to Italy and parts of China have already been cancelled in the fallout from coronavirus
What do people booking travel insurance need?
Earlier this week This is Money looked into what travellers should look for when buying insurance which will cover them if their holiday is hit by coronavirus.
Insurance will likely only cover you if the Foreign Office has described the country you are going on holiday to as somewhere you should only travel to in an emergency.
If you booked a holiday to somewhere and at the time it was booked the Foreign and Commonwealth Office was not advising against all travel to that country, you should be covered under the insurance you have purchased.
Brian Brown of Defaqto, which rates insurance policies, said: ‘What any customer in this situation needs to do is look firstly at the policy section labelled ‘Cancellation/Curtailment Cover’ or similar.
‘They should look to see if one of the perils insured against is the FCO advising against all, or all but essential, travel to a region.
‘If that isn’t mentioned they should look at the exclusions to cancellation cover to see if the policy won’t pay out in the event the FCO advises against travel.
‘If the policy section makes no mention of the FCO advice either way, it is likely that it will not cover the customer if the FCO advice changes.
‘Sometimes though, insurers, especially those with a brand to protect, will pay claims in these circumstances even if the policy doesn’t strictly cater for this eventuality, for example, this happened a lot with the Icelandic volcanic ash.
‘If they decide to buy a new policy now, they must make sure that it will cover them if the FCO changes its advice and tells people not to travel.’
Sally Jaques, of GoCompare travel insurance, said: ‘The situation is developing all the time and travellers are advised to compare cover closely to meet the specific challenges presented by the coronavirus outbreak.
‘Buying travel cover shouldn’t just be a box-ticking exercise where the cheapest policy will do.
‘The potential risks are very specific, and you should check you have the relevant cover and that you understand how your policy will work.
‘We are advising people to check their cover levels for Scheduled Airline Failure Insurance in light of the Flybe collapse, as we may see more airlines struggling with the knock-on effect of coronavirus.
‘SAFI provides cover for your flights if your airline goes into administration and ceases trading, so if your travel insurance includes SAFI, you’ll get your money back for the cost of your flights.’
But it is unlikely anyone who bought travel insurance for a trip to somewhere where coronavirus was a known problem will be covered by that insurance.
You can read more answers to some common questions here.
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