Blog

Dipesh Patel, senior underwriter at Jackson Lee Underwriting spoke to Insurance Post about brokers' roles in ensuing policyholders have the right travel cover, how travel cover is changing and his advice to policyholders looking to travel during the pandemic.

During the pandemic the travel sector saw an increase in complaints, with the Financial Ombudsman Service reporting 2561 complaints in the second quarter of 2020 – how is the industry working to maintain its reputation?

Patel: I have been underwriting travel insurance for over 20 years and we’ve hardly had any complaints because we’ve dealt with some flexibility with our clients. What we’ve seen is when the pandemic first hit, a lot of clients wanted to either defer their policies or cancel their policies to get some sort of refund or they had amended travel dates. What we did was we showed flexibility in all those scenarios. Over the last 12 months, I’ve seen that more and more insurers are on a similar track.

I’m sure there are some cheaper products out there on aggregator sites, where you may not get the same level of flexibility that you will with a more reputable insurer.

One thing I always say to brokers is if you’re going to take the risk of travelling in the current climate, tell your clients to book through a package travel provider and pay by credit card if possible because you get added protection under package travel regulation and the consumer credit Act if the trip doesn’t go ahead.

Travel insurance is quite a complex product and there are so many varieties of coverages out there. The majority of reputable insurers will give decent cover but policyholders should speak to a broker to make sure they get the right level of cover.

Is the demand for travel cover returning?

Patel: If I look at the data for September, October and November, we actually saw a substantial increase in a number of people purchasing travel policies and booking holidays but what we found over the last couple of weeks is that seems to have dropped off now.

Normally during the lead up to Christmas, it does drop off but there was a further drop off following the government’s announcement on a potential lockdown and the French government actually announcing lockdown with UK holiday makers banned from entry.  This has led to so much uncertainty that a lot of people are now just leaving holiday arrangements for skiing until the last minute to see whether they can travel.

The problem we’ve had is we’ve seen over the last 20 months that different governments make different decisions whether its entry requirements, lockdowns etc. There’s a lot of uncertainty as far as travel is concerned.

How is travel cover changing to keep up with the uncertainty surrounding the pandemic?

Patel: If you look at it in March 2020 there was a blanket exclusion for the pandemic, policies would not cover any claims related to the pandemic. If you look at the reputable products out there in the market what you will find is, for example, our product which is endorsed by the British Insurance Brokers’ Association (BIBA). We cover cancellation in the instances the Insured, a member of the household or travel companion contract Covid.

We will cover medical expenses if they catch it abroad, including additional accommodation costs if they only have symptoms following a positive diagnosis and have to isolate. We will also cover their costs if they miss their return flight and cover their repatriation costs back to the UK. 

There is wider cover available than there was 20 months ago, products are adapting to the client’s needs. One element that is still not being built-in is the cover for changing government advice because unfortunately, it does change constantly as we have seen over the last 20 months.

What is the broker’s role in ensuring that policyholder has the right cover for what they need and for where they are travelling during the pandemic?

Patel: Travel is quite a complex product. When you look at it, you’ve got something like 20+ sections of cover, everything from medical to liability, baggage etc. The advantage of talking to a broker, is that they can give very good advice in terms of what cover you have, especially in relation to Covid-19, in terms of answering questions around: What would happen if a destination goes into red lists? What cover if any, do I have under my travel policy? And you wouldn’t get that advice if you were buying on an aggregator site or buying online. That’s what the brokers are there for, to give advice to clients on which is the right policy for the cover they want, or highlight any restrictions in cover, so the client can make an informed decision on the right policy to purchase.

We’ve seen more and more brokers coming through, I get brokers ringing me up if they’re not sure of the answer to their questions for us to let them know how our policy would operate under those circumstances. So it’s just getting that information out in terms of what cover is available, and how the policy will respond in different scenarios.

Do you expect the travel market to see more stability next year?

Patel: I’m hoping that we will find some sort of stability in 2022. In the short term it’s going to carry on, but having the vaccine programme around the world roll out and getting the majority of people vaccinated will help to bring that stability, but that will be the long term goal. I am not anticipating any major changes in the next few months. 

Brokers’ most frequently asked question

Are policyholders covered for cancellations if they catch Covid-19 before travel?

Patel: On our policy yes, and quite a few policies out there will cover the cancellation element but not all. My advice is check your policy before purchasing because not every policy offers cancellation cover. We do and we’ll cover cancellation if the insured person member of the household, travelling companion or even, bearing in mind it’s Christmas and people are travelling to see friends and family, the person they are going to stay with abroad get Covid and you can’t travel, we will cover cancellation.

How are policyholders that do catch Covid while on holidays supported?

Patel: From our perspective, we will cover medical costs if they end up in hospital, we’ll cover additional accommodation costs if they have to self-isolate and if they miss their return flight we will cover their costs of returning back to the UK. We also give confinement benefit if they have to self-isolate of £30 per day so at least they’ve got some money for takeaway food or whatever to be delivered to the hotel. The assistance company will help them out in terms of making sure they get the assistance required if they do catch the virus while on holiday. 

How can insurers support policyholders if the destination country closes the borders?

Patel: We would extend cover if the destination country closes its border for travel once the insured is in the destination and they’re stuck out there. Then cover would be extended under the policy till they’re able to come back because obviously if the policy expires during that period, we don’t want to leave them uninsured if they are stuck abroad through no fault of their own. We’d automatically extend cover to the date they could reasonably return back to the UK.

Will the policy respond if the UK government advises against travel to a destination or imposes another lockdown?

Patel: Unfortunately no, because this advice changes on a regular basis. We’ve seen over the last 20 months every three weeks it was changing. One minute you’re told that you could go to Portugal and then a week later you are told it’s on the Red List; travel insurance won’t cover this scenario.

My advice to clients is if you’re booking trips like that, book through a package travel provider, and ensure your travel provider offers flexibility so if a destination does turn into a red list, for instance, that they’ll allow you to cancel or rebook to a different destination or different dates.