Amin’s holiday had been cancelled due to Covid-19. Although he’d received a partial refund of his travel insurance premiums, his insurer wouldn’t refund the extra "add-on" cover he’d bought because he'd been going on a cruise. As Amin hadn’t actually been on the cruise, the insurer hadn’t ever covered the risk of a claim being made under the add-on. In the unique circumstances of the pandemic, we told the insurer to refund the add-on premium.

What happened

Amin contacted us when his insurer refused to refund his travel insurance policy after his cruise holiday was cancelled due to Covid-19.

He said he’d taken out a single trip insurance policy in early 2020 to cover a one-week cruise he’d booked for later in the year. He’d taken out a basic travel insurance policy but paid for additional add-on cruise cover for his trip. The cruise had been cancelled by the tour operator shortly afterwards, as the Foreign and Commonwealth Office was advising against all but essential travel due to the pandemic.

Amin told us he’d phoned the insurer to ask for a refund for the premiums he’d paid, as he’d no longer need his policy. He’d been offered a partial refund for the basic part of his travel insurance policy, from the date his cruise had been cancelled. But the insurer said its policy terms and conditions said that no refund could be given for add-on cover.

Amin wasn’t happy about this, and asked us to look into his complaint.

What we said

We checked the terms and conditions of Amin’s policy – and confirmed there was nothing to say the insurer had to provide a refund of the premiums paid for add-on cover.

We explained that, unlike the basic travel insurance policy, which provided cover for the cancellation of the holiday, cruise cover only provided a benefit while the policyholder was actually travelling – for example, in the event of missed departure or an itinerary change.

So the cruise cover Amin paid for would only have provided a benefit in the event of a claim occurring while he was on his cruise. However, as Amin didn’t ever travel on the cruise, the insurer hadn’t ever had to cover the risk of a claim being made under his cruise cover add-on.

Given this, and the unique and unprecedented circumstances of the pandemic, we thought it would be fair and reasonable for the insurer to refund Amin the full cost of the premium he’d paid for the cruise cover. So we told it to refund Amin.