Should you take out insurance for a staycation?
According to Saga, less than half of travellers decide to take out travel insurance before a trip in the UK.
Travel insurance is still essential as it can protect you should something go wrong, either before your trip or while you are away, such as losing possessions or needing to cancel due to unforeseen circumstances.
Many UK travel insurance policies will now offer some level of protection around coronavirus disruption too, including cancellation cover should you, your travelling companions, a close relative or member of your household test positive for Covid-19 before a holiday (often within 14 days of travel), as well as curtailment cover (having to come home early). You may also be covered for cancellation or curtailment in the event of a death of a close relative from Covid-19.
Your level of coronavirus cover will vary depending on the policy you choose, when you take it out and the company you take it out with.
For a successful claim, you may need to provide a medical certificate or test result to prove a diagnosis. Known events, such as a positive result before taking the policy out, will usually be excluded, meaning you wouldn’t be able to claim.
In order that you don’t have any unexpected surprises should you need to make a claim, it’s important to read the exclusions on any policy you are considering, as well as what cover is included.
If you travel within the UK against government advice, your policy is likely to be invalid unless you have taken out specialist cover. This could include going away during a national or local lockdown.
Many policies may also only cover UK trips over a certain length of time or need to be a certain distance from your house to be covered (say, 25 miles) and you may need to be staying in paid-for accommodation.
This depends on your policy and when you took it out, however not many travel insurance companies currently offer cover due to a change in government advice.
So, even if you do have insurance, there is no guarantee that you will be covered.
Can I get my money back if travel is banned due to Covid?
If it is illegal to travel, your travel company or accommodation provider should cancel contracts that cannot go ahead due to lockdown laws – known as ‘frustrated contracts’.
The Competition & Markets Authority (CMA) says: “As a result, the contract comes to an end and, where consumers have paid money in advance for services or goods that they have yet to receive, they will generally be entitled to obtain a refund.”
It may be harder to claim your money back from a holiday company if there is guidance in place not to travel, but it is not a legal requirement.
However, the CMA says: “In any event, the CMA takes the view that businesses should treat consumers fairly and responsibly in these circumstances and this may include trying to find a mutually acceptable solution.
“Where a business puts pressure on consumers not to follow government guidance this could be an unfair, and unlawful practice.”
They should give you the option of moving your booking or a refund.
If you booked a package holiday then under the Package Travel Regulations 2018, you are entitled to a refund if the company cancels your holiday before you go.
If something goes wrong with your package holiday, you should report it as soon as you can.
You are entitled to compensation if:
- The holiday you went on was lower in value than the one you booked, for example you paid for a deluxe room but only got a standard.
- You had to spend extra money because of a problem with the holiday.
- A large part of the services you booked weren’t provided – for example your holiday included a two-day excursion that was cancelled and the company’s local representative didn’t organise another.
- Something goes wrong that causes you distress or disappointment, for example if the pool was closed for the whole trip – this is called ‘loss of enjoyment’.
- You were injured due to your travel operators, hoteliers or carriers breach of duty, breach of contract or negligence.
However, you will only be able to get the full cost of the holiday back if it was completely ruined – but this rarely happens.
You can’t get compensation if:
- You simply didn’t enjoy the holiday, even though it matched what you booked.
- The problem was out of the holiday company’s control – like bad weather.
- You’ve already been compensated, for example if the hotel compensated you while you were staying there.
So, if you booked a package holiday you can still claim for certain events, in certain circumstances, even if you have no insurance.
Linked travel arrangements
If you booked ‘linked travel arrangements’ then the situation is different.
It is harder to get compensation as you’ll have different contracts with different companies – like hotels and travel firms.
You should report any problem as soon as you can. You should accept reasonable alternatives, and keep receipts for expenses.
Check the information you got before you booked. It should tell you if anyone is responsible if the company goes bust and who to contact.
For an independent traveller the situation is even more difficult.
It is harder to get compensation if you organised the holiday yourself, because it’s likely that you will have different contracts with different companies – for example, hotels, airlines and travel agents.
You should raise the issue as soon as you can and keep evidence – like receipts for expenses. Most companies will have a complaints procedure that you can go through, so you might get some compensation.
If you are injured, then you may be able to bring a claim against the hotel or coach company directly. It does not matter that you have no insurance.
So if you booked linked travel arrangements or you are an independent traveller and you have no insurance, all is not lost. You might be able to bring a claim directly.
Other ways to protect your money if you do not have insurance when booking a staycation
- Take advantage of flexible booking policies that allow cancellation with a full refund or fee-free amendments should travel restrictions change. Some accommodation companies may also allow you to cancel without a charge up to 24 hours before your trip.
- Paying on a credit card will mean that you have financial protection under Section 75 of the Consumer Credit Act for purchases between £100 and £30,000. You could use this protection if your holiday company were to go into administration or your holiday was cancelled.
- If you can’t pay by credit card, you may have some protection paying by debit card under the chargeback scheme.
If you are reimbursed, will this be in cash or vouchers and which is best?
Some tour operators and travel agents can offer customers a refund credit note for package holidays, if they are not able to provide a cash refund or a full cash refund.
The refund credit note has a future date (the redeemable date) that it can be exchanged for a cash refund or to book a replacement holiday.
The refund credit note can be for the full value of the refund or for part of the refund, along with part cash.
You do not have to accept a refund credit note and can insist on getting a full refund.
So, in answer to the question, ‘Staycations in the UK – what are my options if things don’t go to plan?’, the answer depends on what the claim is for and the particular circumstances. Even without insurance there are steps you can take to protect your money when booking a holiday.
Advice blog by Anthony Hey, Litigation Executive in the Travel team at Hudgell Solicitors