Covid-19 and financial protection for travel plans

Travel has been hit with unprecedented disruption due to the Covid-19 pandemic.

The Financial Conduct Authority (FCA) regulates all companies registered with Open Banking.

Many are trying to claim compensation for Easter and summer holiday arrangements which have had to be cancelled. For those who would like to reschedule or plan ahead, it’s uncertain what the landscape will look like in the months to come.

We’ve put together some points which could help minimise any downsides and risks.

Currensea travel debit card

 

Planning for the future

With the economic implications of the virus taking hold, no one knows what the future holds for travel. However, a number of airlines, travel agents and hoteliers are offering significant discounts for future bookings. To take advantage of these, it pays to ensure you’re well protected.

Pay for bookings with a debit or credit card

While media coverage tends to focus on travel insurance and “section 75” credit card guarantees, what is less well-known is that debit cards also offer protection. 

The Currensea travel debit card gives peace of mind to our customers by providing purchase protection based on the Mastercard chargeback scheme. It ensures our customers get refunds in case of bankruptcies, flight cancellations and hotel closures. 

If you book your holiday through a third-party agent, pay by debit card or even better a travel debit card where possible. If you book your holiday with a credit card via a third party and the hotel goes bankrupt, the Section 75 protection provided by your credit card will NOT pay out. By contrast, the debit card/travel debit card chargeback scheme will cover you. 

Credit cards will repay only if the agent/third party itself went bankrupt, not the final service provider. Something to consider when booking your next holiday.

If you have to pre-pay, pay for bookings in the local currency

Pre-paying for holiday deals may be tempting, given the frequent discounts. However, you need to be particularly careful booking these at the moment. Paying by a card will help protect against many scenarios, but you also need to check your insurance small print to cover any wider cancellations (see below the travel insurance section). 

If you’re protected, make sure you don’t get hit by foreign exchange rate fees. Paying in pounds nearly always means that you’ve already been charged a high FX rate somewhere else in the chain. So wherever you can, it’s a good idea to pay for your holiday deal in the local currency at the time of booking. Using a Currensea travel debit card you’ll get the debit card protection and you’ll also save the 3.5% in fees charged by the average high street bank.

For example, if you use the hotel aggregators to book a hotel deal in Spain, use your Currensea travel debit card and pay in Euros. You’ll pay what you see on the day and won’t pay any bank charges.

Travel insurance – the small print is really important right now

Many travellers could find themselves without insurance, due to the confusing small print of their policies. We’ve done some research and put together a few travel insurance tips that you may find helpful.

All providers are different, but generally you’ll only be covered for cancellation if:

The FCO (Foreign Commonwealth Office), WHO (World Health Organization) or local authorities haven’t issued any advice before you bought your policy. For many insurers, this might have had to include an optional extension which covers events such as a pandemic or other natural disasters – check the small print!

AND 

The FCO has now, since buying your policy, advised against all or all but essential travel.

AND

When you bought your policy with the optional extension, there wasn’t a publicly known outbreak or quarantine in the resort you’re travelling to.

That’s already quite a lot of small print, but there are also a few more points to consider:

1. If the country you are travelling to ceased to issue visas for entry, your airline is responsible for offering compensation.

2. Coronavirus led to refused boarding on your return flight. Your airline or tour operator may be able to refund or reschedule. Some premium travel insurance policies may cover you for additional hotel stays, check the small print.

3. If your airline cancelled your flight, your airline or tour operator may be able to refund or reschedule. 

4. Hotel or cruise ship quarantine should be at the expense of the government or local authority who imposes the quarantine. 

5. Providers consider Coronavirus as a pre-existing condition for travel insurance purposes. For cover, you need to prove you were not travelling against doctors advise and you’re not receiving medical treatment abroad. 

6. You recovered from Coronavirus and were signed off by your doctor as fit to travel. You should be covered by your travel insurance.

7. Your doctor told yo to self-isolate purely as a precaution. Contact your airline, hotel or tour operator, to ask about refunds or changing your travel date. Most policies won’t cover you in these circumstances.

In these unprecedented conditions, we are also facing many cases of hotels, travel companies and airlines going out of business. Some premium travel insurance policies may protect you in these cases under the terms ‘end supplier failure’ or ‘scheduled airline failure cover’. You’ll need to check carefully for these when you purchase your travel policy.

We hope these tips help. In the meantime, do ensure you have your Currensea travel debit card to hand to get the best live interbank exchange rates both for booking your next holiday and ultimately when we all get to travel again!