Martin Lewis: Money Saving Expert on getting travel insurers to pay out for lost holidays

Martin Lewis spoke to a caller on BBC Radio 5’s The Emma Barnett Show this week about her travel insurance woes. Holiday insurance has left many confused amid the coronavirus pandemic as insurers changed how much their policies would cover. The female caller said she bought her holiday insurance on March 6 but the insurer has refused her claim “on the basis that retrospectively they decided that they’re not paying out for any policy bought after March 3.”

This is despite the company not changing their policy details online until March 14, the caller claimed.

Lewis revealed his travel advice on how she could best get the payout she was owed.

“About 90 percent of policies before COVID included the cover that would protect you from COVID – about 10 percent didn’t,” Lewis explained.

“I think that the fact [the holiday insurer] was still selling policies with this cover, and they had just as much pre-knowledge as you do, they should have, as a proper communication, put on the top of [their] website: ‘If you can’t go due to coronavirus, we won’t pay out,’ but they didn’t do that – and I think that’s unfair.”

Travellers wrangling with travel insurers can go to the Financial Ombudsman Service for help.

“Just as you do with any insurance claim, and any problem with insurance companies, they are regulated financial companies and that means the statute says that you can complain to the Financial Ombudsman Service,” Lewis detailed.  

“Now, you make a complaint to the Financial Ombudsman Service… and unlike a court, which solely adjudicates on the law, the Financial Ombudsman Service has three things it looks at.

“The first is the law, the second is have you been treated fairly – and we’re starting to argue together, ‘Well, I don’t think so – if you had just as much foreseeability as me but you didn’t tell me it wasn’t covered that’s not treated fairly.’”

Lewis continued: “The third one, which is really important, is standard industry practice – is it obeying basic standard industry practice?

“Now, in my view… most insurance companies who had pandemic cover are paying out if you had a policy in place on March 3.

“Therefore, this company did not offer any argument, any difference at the point and standard industry practices say it should be paying out.

“And on that basis, I would hope the Financial Ombudsman would say, actually, this is a load of baloney.

“You put a kind of policy in place, it had pandemic cover, she bought it at the right time, you didn’t decide to say we’re not going to be paying out – pay out.”

Lewis warned that the process might well not be a speedy one.

However, if you do go to the Ombudsman, the insurer will have to pay a fee.

“It won’t be quick though, that’s the problem, but… first thing I would do is get in touch with them and say you spoke to Martin Lewis on the radio – he thinks you should pay, he told me to go to the Ombudsman,” said Lewis.

“It’s worth noting, if you go to the Ombudsman, they have to pay.

“There’s a fee for them for you to go to the Ombudsman – and you could say to them, I’m giving you one last chance before I go there.

“If you want to settle this now, I’m happy. Otherwise, I’m going to the Ombudsman.”

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