Brexit could see travel insurance costs skyrocket, predicts CII

Research conducted by professional body the Chartered Insurance Institute (CII) revealed that 76% of insurance professionals believe that consumer prices for travel insurance will escalate once the UK exits the European Union (EU).

The survey, which polled 114 CII members this month, also found that 24% do not expect Brexit to inflate the cost of travel insurance.

Kevin Hancock, chair of the CII’s Society of Insurance Broking, said: “The Brexit withdrawal agreement means that unaltered transitional arrangements stay in place until at least 31 December 2020 and, following that, it depends what is negotiated in terms of reciprocal medical arrangements between the UK and EU member states.

“The general consensus though is the cost of European travel insurance will eventually increase.”

Whether the UK agrees reciprocal healthcare agreements with individual countries as part of the Brexit deal could influence travel insurance prices, continued the CII.

Claims potential

Martin Ashfield, board member of the CII’s Society of Claims Professionals, added that the potential for extra security checks at airports, as well as at coach or ferry terminals, post Brexit could lead to claims for missed departures and delay compensation.

“Most policies will provide cover for delayed departures, certain timeframes apply, however, if a customer misses a flight, coach [or] ferry due to extra checks at security [or] borders, costs for additional travel and/or accommodation would not normally be covered.

“It is however expected that insurers will adopt a reasonable approach to claims where it is clear the customer has allowed enough time to get to the airport, coach [or] ferry terminal.”

Travel requirements

Furthermore, Ashfield explained that customers travelling using a British passport come Brexit may be required to have a minimum of six months left before expiry in order to travel. British passport holders travelling to the EU as a tourist or up to 90 days, however, will not need a specific visa to travel.

Those travelling by car or motorhome will require a green card and a GB sticker for travel to some countries, as well as an international driving permit. These requirements vary by country.

“In all scenarios, the travel policy will not respond if the customer doesn’t hold the necessary documents. This isn’t unique to Brexit, there has always been an exclusion in policy wordings to protect against claims for incorrect [or] lack of required travel documentation,” he said.

In terms of the European Health Insurance Card (EHIC), Ashfield added that this will depend on the agreed deal.

“The EHIC would still be valid until the end of 2020. If the UK leaves without a deal, UK citizens can’t rely on the EHIC being valid.

“While this may not directly affect customers, providing the policy covers their pre-existing medical conditions, it does affect insurers for the obvious reasons of increased medical claims costs,” Ashfield concluded.