With so many upcoming holidays being cancelled, many people are opting to terminate their travel insurance policies, only to find out that they aren’t entitled to a full refund.
This has caused a lot of confusion among those who are no longer able to go on their trip and feel that their travel insurance policy is therefore no use to them.
I’ve cancelled my travel insurance policy as I am no longer going on my trip – why won’t my travel insurer give me the full premium back?
Many travel insurers are offering pro-rata refunds to customers who no longer wish to keep their policy in place. However, there are several reasons why some customers may not be entitled to a full refund.
You’ve exceeded the cooling-off period
Most travel insurance policies have a 14-day cooling-off period which begins from the date you purchased your policy. This period gives you 14-days to cancel your policy and receive a full refund if you change your mind and no longer want it. After the cooling-off period is up, you are no longer entitled to a full refund as you will have had enough time to read through your policy wording, and documentation, and decide whether it is the right policy for you and your holiday.
However, some insurers have extended this period up to 28 days due to the coronavirus outbreak. So, it’s always worth checking your policy wordings to see how long you have to change your mind, or else you may not be entitled to a refund should you cancel.
Protection has already been in place for some time
Another reason many people haven’t been able to get a full refund is because their policy may have been in place and providing cover for some time.
For example, if you booked your trip in November 2019 and bought your single trip travel insurance on the same day, your cover for holiday cancellation would have started that day. If you then, unfortunately, had your holiday cancelled by your tour operator in March 2020, your cover had already been in place and protecting you for any pre-travel issues for those four months, whether you needed to claim or not.
Remember, travel insurance is there to protect you both before and during your trip. It’s very similar to car insurance in the respect that you may never need to claim on your insurance, but you will have been protected all the time cover was in place.
You’ve already claimed through your insurance policy
It’s also worth knowing that you are unable to receive a refund for your travel insurance policy if you have already claimed through your travel insurance.
For example, if you bought an annual multi-trip policy and made a claim before cancelling your insurance, you wouldn’t be entitled to a refund as you had already used your policy.
Insurance providers take a premium so that they can pay your claim. Unfortunately, they can’t settle your claim and then refund your money.
Things to consider before cancelling your travel insurance
While some people may have received money back for cancelled trips from their tour operator or credit card provider, and no longer feel their policy is necessary, it’s worth thinking twice before cancelling it. Here are a few things to consider before terminating your policy completely.
You’re sure you no longer need cover
You must be sure that you absolutely no longer need the cover. This is especially important for those who are still waiting for money back from their travel agent or tour operator, as you never know what could happen during this very difficult time.
You have protection for any trips that may have been moved
If your tour operator has offered to move your travel dates to next year, for example, you will want to ensure you have cancellation cover in place to protect this future holiday.
If you have a single trip policy, it is worth contacting your insurer to see if they can change your travel dates, instead of cancelling and purchasing a new policy.
You won’t be booking a new trip while your cover is still valid
The Foreign and Commonwealth Office could change their travel advice and you may want to book a trip within the next few months when restrictions ease. Finding suitable travel insurance could be tricky as many insurers have pulled their cover from the market or changed their policies for new customers to exclude any claims related to the coronavirus.
Of course, everyone’s circumstances are different so it’s always worth getting in contact with your travel insurance provider and discussing exactly what options may be available.