ABI: Travel insurers to pay £275m in cancellation claims

The Association of British Insurers (ABI) has estimated that travel insurers will pay out £275 million in cancellation claims due to the COVID-19 pandemic.

ABI: Travel insurers to pay £275m in cancellation claims

In a letter responding to the Treasury Select Committee, Huw Evans, ABI’s director-general, laid out the steps insurers have taken so far to help customers during the COVID-19 pandemic.

ABI revealed that travel insurers will handle 400,00 cancellation claims, marking a record level of claims and pay-outs, beating the £148 million paid out in cancellation claims for the volcanic ash cloud in 2010.



The association said that insurers have agreed important pledges on home, motor and travel insurance to help and support customers. It emphasised that it would help ensure that drivers are not penalised following the suspension of vehicle MOT testing and will provide cover for the cancellation of events and school trips.

It said that it has also been working to support the NHS with the use of the private health sector and individual members have been working in their communities to provide increased cover for NHS and key workers.

ABI members have also signed up to six commitments to support customers with their travel insurance. The commitments include considering all valid claims for cancellation and travel disruption where compensation is not available elsewhere as quickly as possible, and, if necessary, ensuring that extra resources are available to offer prompt help and advice to customers.

In terms of home and motor insurance commitments, member’s of ABI have also signed up to further commitments to support customers. The commitments include waiving any requirements to extend cover for key workers who may need to drive to different locations, people who want to help their communities by transporting medicines or groceries to support those affected by Coronavirus and office workers who need to work from home.

ABI has also said that during this time, private medical insurance customers will continue to be supported through a range of virtual online health care services. 

Following Government advice for schools to close, the ABI and its members have also been engaging with HM Treasury and the FCA to ensure that insurers are able to continue to processing claims in a timely efficient manner.

This is particularly important for insurers and loss adjusters where the recovery is ongoing to support those home and business customers affected by the flooding from Storms Ciara and Dennis in February 2020.

Given the ongoing need for alternative accommodation to help those affected by the flooding the ABI also supports some hotels remaining open where possible through the crisis.

Read all of our articles relating to COVID-19 here.

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