Frustration over insurance firms refusing to provide travel refunds

Over recent months we have received queries and complaints about travel insurance and two came in last week asking the same basic question.

First up was Jarrod, who asked if we knew “if anyone has successfully received a refund on multi-trip insurance or even a part refund given we were not able able to travel for most of 2020?”

He said he has lodged a formal complaint with his insurer, Vhi, but it was saying he could still travel – "despite the Government discouraging it".

He pointed out that the same company’s health insurance division had returned money to policyholders “as we could not use hospitals, should travel not be the same?”

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He said that instead of issuing refunds, the company was “offering a pointless free six months extension of cover [when] we still can’t travel.”

Vhi has been sending its travel insurance customers a letter telling them about the extension.

“We understand that Covid-19 is having a significant impact on travel, making it difficult for you to use your Vhi MultiTrip travel insurance,” the letter starts with significant understatement.

“In recognition of this and to thank you for your continued loyalty, we are providing you with an additional six months cover on your Vhi MultiTrip policy from your renewal date of February 14th, 2021, at no extra cost. This means that you are now covered until August 13th, 2021, and you will not be charged for the additional six months,” the correspondence continues.

Accommodation

In a telling warning it adds that “the policy does not provide cover for claims relating to Covid-19 with the exception of emergency medical treatment abroad”.

It concludes by saying that as "more people have decided to holiday in Ireland, you will also have cover for any trips within Ireland, once you stay a minimum of one night and you have pre-booked and paid for your accommodation, prior to your departure".

Another reader called Angela mailed us and started by saying she was “not happy”.

“I buy annual travel insurance every year for the family,” she says. She does not identify the company. “I always auto renew so no gap in cover. I renewed in June 2020 for the family at a cost of €78.26 stupidly thinking that we might get away in 2020,” she says.

“We aim to be a Covid-compliant family so would not dream of stepping on a plane for a family dental appointment in Tenerife. For some reason our travel insurance policy flashed into my head this morning. I have paid for it but have not had any benefit from it and nor will we have any benefit from it for the rest of the insurance period. I rang the insurance company and they said to get a full refund I would have had to cancel within 14 days of putting policy in place,” she says.

“They will refund me €25 on a pro rata basis. So if I had my light bulb travel insurance moment in say September 2020 they confirmed I would have got more money back. I think this is wrong and insurance companies are benefiting from our misfortune. I think it would have been reasonable to get a full refund minus say an admin charge of, say, €20,” she continues.

“They asked me if I wanted to lodge a complaint so I said yes please. We will see how it goes but maybe there would be benefit in bringing this issue to light on a national level.”

Response

We contacted the Vhi and a spokeswoman said the company “understands that Covid-19 has had an impact on people’s ability to travel”.

She said that since last March it had rolled out a “range of measures to support customers who have Vhi Multi-trip”.

She pointed to enhanced cover for trips in Ireland, a reduction in the price of the annual Vhi MultiTrip policy and an extension of the cooling-off period from 14 to 28 days for customers renewing.

She also said there was cover for Covid-19 cancellation claims for all renewing customers who booked holidays prior to 19th March 2020 and she said there was an extension of cover for six months free of charge.

“MultiTrip is an annual policy where premium is paid upfront for the renewal year and cover is available immediately. Due to Covid-19, there was a spike of cancellation-related claims last spring and summer as people had to cancel their trips and we’ve continued to see travel claims throughout the remainder of 2020. Cover for cancellation is one of the main reasons people take out travel insurance,” the spokeswoman said.

“Vhi MultiTrip is different from our health insurance product. We provided two premiums waivers for our health insurance customers because claims were lower than anticipated. We also waived a portion of premium for our dental customers again because claims were lower than anticipated.”