Travel disruption has been a feature of news stories since the early days of the Covid-19 pandemic. The type of travel issue or disruption, and the type of insurance claims and complaints, have evolved alongside the pandemic.
In this blog, Ombudsman Leader, Sian Brightey, outlines some of the trends we’ve seen and highlights our guidance for insurers on handling travel insurance claims and complaints.
The type of travel insurance complaints referred to us at the Financial Ombudsman Service has evolved alongside the pandemic. As airlines cancelled flights, accommodation closed, and people couldn’t travel, we saw a significant increase in the number of complaints brought to us.
Initially, many of the complaints we saw were from customers who had been stuck abroad due to border closures, or who had their holidays cut short or cancelled, as well as customers who were given a voucher by their accommodation or transport instead of a refund. We also saw a large number of complaints about declined insurance claims where changes in Foreign, Commonwealth & Development Office (‘FCDO’) travel advice and changing ‘travel corridor’ restrictions prevented travel.
More recently, we’ve started to see complaints involving holiday cancellations due to positive or delayed Covid-19 test results. And in the spring and summer of this year, travel disruption continued. In some cases, this was indirectly linked to the pandemic – as many airlines cancelled flights due to Covid-19 related staffing issues.
To help prevent future claims turning into a complaint, we’re sharing some useful tips following the range of complaints we’ve seen for insurers to think about when handling travel insurance claims and complaints.
Tips for handling claims and complaints
Listen to your customers’ concerns, treat them with empathy and hear their side of things
You may come across complaints from customers who haven’t had the opportunity to travel in the last couple of years, and have experienced delay or cancellation to their plans. This can be distressing, particularly if their personal circumstances have now changed.
When you are dealing with complaints, you should listen to your customer’s concerns and find out why they feel they’ve been treated unfairly, and let them know in writing that you will be looking into their concerns.
Take your time to review what happened and consider the circumstances
Some of the good practice we’ve seen in complaint-handling, is when businesses have taken the time to review what happened and to consider the individual situation the customer experienced, as well as the policy terms and what is fair and reasonable in all the circumstances.
Keep your customer informed
You should let your customer know in writing that you’ve received their complaint and when they should expect to receive your response. You should also keep them informed about the progress of their complaint and, importantly, let them know if you think it will take longer than expected to respond to them or to resolve their complaint.
Gather relevant reports and evidence
To help you come to a fair and reasonable decision, you should gather relevant reports and evidence, this may include:
- evidence from your customer about what happened
- any relevant supporting evidence, such as evidence of Covid-19 test results or written evidence about disruption from the airline
- relevant Financial Conduct Authority rules and guidance such as the Insurance Conduct of Business Sourcebook and the rules on general and protection insurance product sales
Is the policy clear?
If you are dealing with complaints about mis-sold travel insurance policies, you should carefully think about the sales journey from your customer’s perspective and check the information provided was clear, fair and not misleading.
Were any gaps or limitations clearly highlighted to your customer?
If you are handling a complaint that involves Covid-19, consider whether the cover was made clear to the consumer in the policy schedule, the policy terms and conditions and the Insurance Product Information Document (‘IPID’).
A consumer shouldn’t have to cross refer different sections of the policy to work out what is and isn’t covered. We wouldn’t expect a consumer to have to check the additional cover options/policy extensions to help understand what’s covered or not covered under the policy as standard.
Do the policy terms and conditions reflect current practice?
For example, access to Covid-19 testing is now more limited than it was at the start of the pandemic. And, the requirement to register positive Covid-19 test results has now changed. The policy terms should clearly explain what supporting evidence is required in the event of a claim.
How long you have to resolve a complaint
If you’re able to resolve the complaint within 3 business days of receiving it, you can send a summary resolution communication.
If you can’t resolve the complaint within 3 business days, you’ll need to send a full written response to your customer’s complaint within 8 weeks.
Putting things right
If your customer has lost out as a result of a mistake, you should take the appropriate steps to put things right. And if your customer hasn’t received the level of service they should expect, sending an apology can often be enough to fix mistakes that cause minimal impact and are put right quickly.
But if an error has caused your customer more than the levels of frustration and annoyance you might expect from day-to-day life, and the impact has been more than just minimal, you should consider awarding compensation.
Our online guidance and case studies
You can find more specific and detailed guidance about travel insurance complaints including travel curtailment, missed departures, medical expenses and repatriation, as well as case study examples, in the travel insurance section of our website.
Our other blog posts
A new Consumer Duty – setting a higher standard of care for consumers
Pre-paid funeral plan providers – an introduction to the Financial Ombudsman Service