Which? Survey Shows Demand For Parametric Flight Insurance

Approximately 2.3 million people across the UK have not received money back for flights they could not take in the last year, with many unable to fly because of national or local lockdowns or restrictions at their destination, according to new research from Which? magazine. The story highlights the level of demand for automatic flight insurance, that brokers and travel insurance specialists can tap into this summer, as lockdown gradually ends.

Fact is, no matter what the T&Cs say on the airline website, once a Covid outbreak is detected in a holiday resort, all bets are off. If consumers can get the flight portion of their trip refunded within hours, then that’s something to lessen the disappointment.

Since the UK went into its first lockdown in the middle of March last year, millions of people have had flight bookings that were not cancelled by the airline, but for reasons that were often out of their control they could not take, meaning that they were not legally entitled to a refund or guaranteed a successful claim through their travel insurance or bank.

Under EU 261 regulations, passengers flying on an EU-based carrier or flying from a country in the EU are entitled to a full refund within seven days if their flight is cancelled by the operator, but the regulations do not currently offer passengers any protection if their flight is not cancelled. However, in some circumstances where passengers couldn’t travel, it could be argued that the contract between the passenger and the airline had been frustrated.

Many passengers have been prevented from travelling because of local or national lockdowns, restrictions preventing entry at their destination, or the Foreign, Commonwealth and Development Office (FCDO) advising against non-essential travel.

Passengers in these circumstances would often have only been given the choice of rebooking their flight or losing their money. Rebooking may have meant paying a significant difference in fare if the new flights were more expensive, and trying to choose new dates without knowing when international travel is likely to resume again.

Of those who told Which? they didn’t get their money back, half (49%) claimed they could not travel because of national or regional lockdown restrictions instructing them to stay at home. While during the first national and local lockdowns instructions against non-essential travel were not always written into law, many passengers did not fly due to government guidance.

Although many UK travel insurance specialists offer various Covid-related policies, most do not cover the complete cancellation of the trip. Instead insurers have concentrated on helping those under aged 65 who are stranded abroad due to someone contracting Covid, or a local lockdown which means a flight home was missed. The problem with covering entire trips is that the premium would be so high when compared to the risk of paying out say £4000 for a typical luxury family holiday.

The solution is to perhaps offer products that specifically cover the flight element, as many people now act as their own travel agent and can – in some cases – reschedule their booking in terms of accommodation and transfers themselves.


As Lemonade has demonstrated in the US market, consumers like the idea of using an app that gets you instant cover on-demand, then settles a claim when you scan in, screenshot or email evidence of loss. If insurers can can market an easy-to-use claims solution that cover any Covid-related cancellation, even if the flight was NOT cancelled, but the trip was blocked due to local lockdowns or government rules, then we have a winner.

What people don’t want is months of argument, either by email, or over the phone to call centres where operators simply read from scripts. This is where the airline industry fell down last year and insurance brands would be wise to sidestep that time-consuming admin side of flight related claims. People invest their emotions, as well as their money, in a big family holiday.

Protecting part of that dream, by settling up flight claims within hours, not days or weeks, if things go wrong, is a chance for the industry to become the good guys. Products like the Koala-Ulysse deal, where you can get 70% of the flight price back when you cancel for any reason, are definitely heading in the right direction.


About alastair walker 10894 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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