Coronavirus and travel insurance

Written on 04/23/2020
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Coronavirus has probably changed the way you think about holidays. Whether it’s UK or abroad, one of your concerns is going to be how safe your money is when you book and what you can do if your holiday is cancelled. This guide covers your options.

Can I get a refund from my travel provider if they cancel my trip?

You will usually be entitled to a refund when you have paid money in advance to a UK company for travel services that cannot be provided because of the coronavirus pandemic.

Unfortunately, many airlines or holiday companies have a backlog of refund claims, and some refunds are taking longer than normal. However, if you believe you are entitled to a refund then keep chasing them.

You might be offered vouchers or a credit note and the option to arrange an alternative flight or holiday. But taking vouchers or a credit note could be risky, as you are unlikely to be able to use them if your travel provider goes bust. Taking vouchers may also affect other ways to claim if things go wrong, such as via your credit card provider or your travel insurance.

If you are dealing with a UK company you can insist on a full cash refund, you don’t have to take a voucher or rebook your holiday. For non-UK based companies, you may not be entitled to a cash refund.

If your holiday provider refuses a refund (if they are non-UK based) and tells you to claim on your travel insurance or with your credit card, make sure you get this in writing. You’ll need this as evidence to show your insurer or credit card provider.

If you can’t get a refund from your travel provider, your other options are below.

What happens if only part of my holiday has been cancelled?

If part of your holiday is cancelled and it wasn’t booked as a package holiday, it’s possible that only the provider of the cancelled part of your holiday will offer you a refund. For example, if your airline has cancelled your flight, but your hotel booking is still available, you will only be entitled to a refund from the cancelled flight.

However, it’s worth contacting the holiday provider of the parts that have not been cancelled to see if they will offer you a refund before making a claim on your travel insurance policy.

If the travel provider is still offering their service (for example, the hotel is still offering you accommodation despite the fact your flight has been cancelled), then you will not be entitled to a refund and you are unlikely to have the right to claim on your credit card [see below].

See the Which? website for more help making a claim for a cancelled holiday if you booked it as a package holiday.

Can I get a refund from my credit card provider for a cancelled holiday?

If you booked a holiday or flights costing between £100 and £30,000 and paid either a deposit or the full price on your credit card, you may be able to make a claim under ‘Section 75’ of the Consumer Credit Act 1974. This applies if the airline or holiday company goes bust or the holiday is cancelled.

What is covered:

  • the cost of your flights if they’re cancelled or if the airline goes bust
  • the cost of your holiday if it’s cancelled or the holiday company goes bust
  • additional expenses or consequential loss – for example, if you had to buy more expensive flights to get home after an airline failed.

What isn’t covered:

  • in some cases, if you buy a ‘flight only’ from a third party, such as a travel agent, you might not be able to make a claim because the third party was only contracted to provide the tickets and not the flight.
  • if you didn’t pay the travel provider directly using your credit card – but instead paid through a third party such as a travel comparison website or third-party payment processor like PayPal, you may not have Section 75 protection.
  • purchases made by additional cardholders may not be covered, unless the purchase was made on behalf of the main cardholder
  • any costs that you didn’t have to incur – for example, if you decided to extend your stay after the airline went bust (longer than you needed to) you’d be unlikely to be able to claim for extra costs.

See our full guide to Section 75 for help making your claim.

What if I booked on a debit card or I don’t have a valid Section 75 claim?

If you paid with your debit card (or a prepaid card) or if it was a credit card booking not covered by the Section 75 rules then you might still be able to get a refund under the ‘chargeback’ scheme.

See our guide for full details on how to make a chargeback claim.

Making a claim on your travel insurance

All travel insurance policies are different. But most will cover you if you have lost money after your holiday has been cancelled, including because of coronavirus.

If you are claiming because your holiday has been cancelled then your travel insurer might expect you to have attempted to get a refund first from your airline, accommodation provider or holiday company.?

Join our Facebook group, Coronavirus and your Money for money news and updates as soon as we get them, as well as a place to ask money questions, share worries and help others out.

See the section above for more information on getting a refund from your holiday company.

If you paid for your holiday by credit or debit card, some travel insurers might ask you to make a claim with your card provider before making an insurance claim.

Making a claim with your credit card provider could mean you get more of your money back. Unlike an insurance claim, a claim with your credit card provider under Section 75 will not require an ‘excess’ payment (where you have to pay the first part of any claim) or limit your claim (as long the amount you paid was below £30,000).

You’ll also be able to get money back for anyone you also booked for on your card who doesn’t have or isn’t covered by your travel insurance.

See above for more information on making a refund claim with your card provider.

What happens if my holiday provider goes bust?

If you book a package holiday with a UK-based firm (where you buy multiple parts of a holiday, eg flights and hotel, from one company or website, in one transaction) then you won’t lose any money as long as the company was ATOL-protected.

ATOL is a scheme run by the UK’s airline regulator: the Civil Aviation Authority (CAA). Find out more about making a claim from the CAA website.

Generally, flights booked directly with an airline and some flight-only bookings with your tour operator will not be protected unless you have received an ATOL protected certificate with your booking.

What if my holiday was not ATOL-protected?

If you booked a ‘DIY’ holiday, or it’s not UK-based, you probably won’t have ATOL protection.

Unfortunately, your travel insurance policy may not cover you if your holiday provider goes bust, but it’s still worth checking the terms of your cover.

However, if you paid for your holiday by credit card then you may be able to get your money back from your credit card provider.Get up to date information about travel advice from the Foreign Office on the Gov.uk website.

This article is provided by the Money Advice Service.

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