Seven Things Older Travellers Need to Know About Travel Insurance Post-COVID
Among the many things we’re all looking forward to as we hopefully make our way out of the COVID-19 pandemic in 2021 is travelling again.
But fears of a ‘third wave’ in Europe as several countries see cases rise again remind us all of how quickly the best-laid plans can become undone during this pandemic.
If you have booked a trip already this year or are planning to do so, travel insurance is a must. With so much uncertainty shrouding our prospects of travel, insurance is the best option we have for guarding ourselves against the financial risks of cancellations. Even then, the protection it offers is not complete.
Older travellers have long had reason to feel disgruntled about the way they are provided for by the travel insurance market. Grievances range from spiralling costs linked rather crudely to age, to outright age caps which simply bar people from buying policies altogether.
COVID-19 has shaken the travel insurance sector as it has done the entire travel industry. Providers know they are taking on more risk, and that affects their business models. Older travellers are likely to be disproportionately impacted by these changes.
Here’s what senior travellers need to know about buying travel insurance post-COVID, and how they can avoid the most detrimental consequences.
Insurers are more cautious about who they sell policies to
Travel insurers know that, in the immediate aftermath of COVID-19, they are more likely to receive claims against policies they sell. A lot of this is to do with the increased risk of cancellations.
Some have reacted by declining to cover anything to do with COVID-19, or at least by severely limiting the types of claims they will cover. But they also know that this is not a good look – people naturally want protection against COVID-related risks, and will flock to providers who cater to them.
Insurance companies are therefore looking at other ways to limit their liabilities, including tightening who they will sell policies to. Older travellers are likely to be on the sharp end here.
Rightly or wrongly, insurers believe older people are more likely to make claims against travel insurance. It’s therefore likely that more companies will introduce or lower age caps in order to reduce their liabilities, making it harder for older customers to find policies.
But you should be offered an alternative if you are refused cover
One crumb of comfort for older people in the UK is that if a travel insurance firm does decline to sell them a policy, they should be pointed in the direction of someone who will. This is part of a government-backed agreement dating back to 2012.
It’s not clear how widely this is applied – a lack of awareness among consumers possibly means not very. Suffice to say, you are well within your rights to ask a company who won’t sell you travel insurance to give you details of a suitable alternative. There are specialists who make it their business to sell over-60s travel insurance policies who would be more than happy to help.
‘COVID cover’ often doesn’t include cancellations
It’s important not to assume that any travel policy advertised as offering ‘COVID cover’ will include any and all claims related to the pandemic or the virus. In fact, it’s a very high probability that it won’t.
According to analysis of travel policies in the UK by Which?, two in five providers only cover COVID-related medical claims and repatriation, i.e. if you fall ill with the virus while abroad and need medical treatment and/or transport home. These policies offer no protection against cancellations due to COVID-19.
And when it does, not all cancellations are equal
It is equally important not to fall into the trap of assuming that cancellation cover means cancellation for any reason. The same Which? study found that another two in five UK insurers will pay out if you have to cancel because you or someone in your party catches coronavirus.
Only one in five offer cover in case you have to self-isolate without a positive test, i.e. because you have come into contact with someone who has tested positive. No providers were found offering cover for cancellations stemming from a change in government advice, e.g. renewed travel bans, lockdown rules or warnings against travel to certain places.
Travel insurance is becoming a premium product
For older customers, travel insurance has always been notably more expensive than it is for most. But among all demographics, there has been a tendency to prioritise price over all other factors and base buying decisions on the cheapest option available.
That is changing, partly because buying habits in general are shifting away from budget policies in order to get more robust protection, and partly because insurers are increasing prices to adjust their own risks.
Long term, this may benefit older travellers. A general reorientation towards more premium policies, higher levels of protection and higher prices will encourage more providers into that end of the market, making it more competitive and flattening off some of the extremes in price hikes some older customers have traditionally faced.
You may need vaccination to get travel insurance
There has already been a lot of talk about whether ‘vaccine passports’ will be needed to travel to certain countries. The same may apply to buying travel insurance.
At this stage, it seems highly unlikely that this will become a universal requirement imposed by all travel insurance providers. But on the back of reports that the EU is considering making vaccination a condition for travelling into the bloc, travel insurance companies have indicated that, should that happen, they would only cover people who have had vaccines for travel to Europe.
Of course, if a vaccine is a requirement for entry into the EU, insurance companies don’t really have much choice but to follow suit – just as they won’t insure people for travelling against government advice.
But it will be interesting to see whether non-vaccination gets pushed any further as an exemption for travel insurance cover, or at least an exemption for COVID-related claims. Older people do, of course, have an advantage here in as much as they have been prioritised for early vaccination, but whether or not you actually have get the jab comes down to personal choice.