Travel: Insurance

Treasury written question – answered on 8th July 2020.

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Photo of Liz Saville-Roberts Liz Saville-Roberts Shadow PC Spokesperson (Home Affairs), Shadow PC Spokesperson (Women and Equalities) , Plaid Cymru Westminster Leader, Shadow PC Spokesperson (Justice), Shadow PC Spokesperson (Business, Energy and Industrial Strategy)

To ask the Chancellor of the Exchequer, what steps he is taking to ensure that holiday insurance companies do not insist that claimants first file for a chargeback claim before they pay out on claims; and what discussions he has had with representatives from the Financial Conduct Authority and (b) Competition and Markets Authority on that matter.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

Travel insurance typically applies only for losses that cannot be recovered from elsewhere. Customers should therefore first contact travel providers or accommodation providers for reimbursement. In the next instance, credit card providers would provide a refund under Section 75 of the Consumer Credit Act 1974 if the payment was made by credit card and cost was over £100 per unit. However, travel insurance policies differ so customers should check the terms and conditions of their policy or speak to their insurer.

The Financial Conduct Authority (FCA) has published guidance for firms handling consumer claims during the Covid-19 crisis. Where consumers have two potentially valid avenues of redress against regulated firms (for example, from an insurer and credit provider) there is nothing in their rules that stops an insurer, credit provider or other regulated firm settling the claim in full (so long as there is no disadvantage to the consumer in this) and, where appropriate, seeking to claim back from the other firm involved.

The FCA will be consulting in the coming weeks on guidelines so that in future their expectations of firms and the choices for consumers will be clearer. More broadly, the FCA has said that, in light of COVID-19, insurers must consider very carefully the needs of their customers and show flexibility in their treatment of them.

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