Tag: travel. insurance

Consumers face losing thousands amid travel protection breakdown

Which? is warning urgent action is needed to protect consumers who face losing large sums of money amid a breakdown of the system of travel protections.

The consumer champion has been inundated with messages and requests for help from people who face losing large sums – with some airlines and package travel providers refusing to meet their legal obligations to issue refunds for cancelled flights and holidays.

While Which? supports the government exploring options to help the travel industry, it is demanding that the crisis not be used as an excuse to undermine consumer protections. Reports of some package providers refusing refunds running into thousands of pounds in expectation of changes to the law are unacceptable.

Which? has heard from a family who were meant to be travelling to a wedding in Italy and whose flights have not been cancelled, despite Foreign Office (FCO) guidance against going to the country hardest hit by the virus.

Instead, the airline is offering to switch their flights to more expensive ones in the future. In some cases this can cost as much as £100 more per person.

The consumer champion has also been contacted by unhappy airline customers who are being offered vouchers instead of being refunded, with many complaining that they have received no clear guidance from their airline about what the next steps will be.

All flights on EU carriers in or into the EU and all flights leaving from an EU airport are protected by the EU’s Denied Boarding Regulation, which requires refunds or rerouting when flights are cancelled.

People have also been in touch reporting that their travel agents are refusing to offer refunds for cancelled holidays, despite travel regulations. Dozens of holidaymakers due to travel to France in the coming weeks have told  Which? that their travel agent is refusing to issue a refund.

One customer was refused a refund for his holiday with a well-known beach holiday specialist. The customer faces losing £2,300 and the only options being offered are a credit note or rebooking. And, that if he decided to cancel instead, he would have to try to claim on his travel insurance.

The law says you are entitled to a full refund if your package holiday is cancelled because of extraordinary circumstances at the destination – so you do not have to accept a credit note.

Faced with these difficulties, many people are finding themselves pushed from pillar to post between airlines, tour operators and insurance companies – whose policies are not set up for providers failing to fulfill their duties in this way.

Which? has also heard from holidaymakers who have fallen foul of little-known exclusions in insurance policies – meaning they were not covered for cancelling an upcoming trip, even after the FCO advised against travel to their destination.

Many more people are concerned that they will be uninsured for upcoming trips booked well before the coronavirus outbreak as insurers make sudden changes to their policy terms and conditions.

Taken together, these issues represent a serious breakdown of the current system of travel protections, which is vital to ensuring millions of consumers have the confidence to book expensive holidays and flights abroad.

Urgent action is needed to protect consumers amid the crisis in the travel industry. It is vital that any emergency measures under discussion, such as credit notes replacing refunds for package holidays, include strong guarantees or protections so consumers know they are not at risk of losing their money if a travel firm fails.

And while consumers with holidays booked under the current regulations may choose to accept a credit note, their right to claim a refund must not be taken away retrospectively by any changes to the law. The hard-earned money of thousands of holidaymakers – who may be facing difficulty themselves – must not be used as a backdoor bailout of the travel industry, when direct government support is being used in other sectors.

While the current uncertainty continues, airlines must respond swiftly to this fast-moving situation by informing passengers about what is happening with future flights, and show flexibility with rebooking options if a flight has not been cancelled.

Insurers must also heed last week’s warning from the FCA about treating customers fairly and work with the government and travel industry on solutions to tackle the coronavirus crisis, as the public must have confidence that they will be covered when they travel.

Rory Boland, Which? Travel Editor, said: “We’ve heard from hundreds of people who face losing large sums of money because their travel plans have been left in tatters or they have been abandoned abroad and face extortionate bills to get home.

“It’s vital that the government, insurers and the travel sector work together to tackle the huge challenge posed by coronavirus, as the travel industry depends on people having confidence that they will be protected in times of crisis.”

Which? is a non-profit organisation working to make life simpler, fairer and safer for consumers. During the coronavirus crisis, Which? is making a range of news, advice and guides available for free for anyone who needs it at https://www.which.co.uk/news/coronavirus  

Summer Holidays – but not for all …

Can’t afford to get away on holiday this summer? You’re not alone – it’s a Europe-wide issue, as EC economic analyst M. Vaalavuo explains ...

seaside

Schools are closed, summer holidays are here, and also this blog is having its well-deserved summer break. Like many of you, authors of Evidence in Focus are leaving their desks to travel in Europe and beyond. However, without wanting to spoil your holidays, this may be a good time to recall that 39 per cent of Europeans cannot afford paying for one week annual holiday away from home.

This is a form of deprivation that is taken into account in the calculation of the EU’s indicator of the risk of poverty and social exclusion (AROPE) which counts people who face

  1. monetary poverty (discussed already in several blog posts e.g. comparing the situation of young and old Europeans and looking at parental employment and child poverty), and/or
  2. low work intensity, and/or
  3. severe material deprivation.

The last one is an absolute measure of living standards that complements the measure of relative monetary poverty (people with disposable income below 60 % of the country’s median income). The EU severe material deprivation rate is currently defined as the share of the population living in households that cannot afford at least four out of nine items. 8.9 per cent of the EU population were in this situation in 2014.

One week annual holiday away from home is one of these nine items. Other items are for example the capacity to face unexpected financial expenses, to afford a washing machine or a car, and the ability to avoid arrears in mortgage or rent payments. The most prevalent forms of deprivation concern holidays and the capacity to cope with unexpected expenses.

Across countries, there is a huge variation in the share of people who cannot afford holidays away from home (see chart). In the Nordic countries, Luxembourg, the Netherlands and Austria, fewer than 20 per cent of the population are deprived of an annual holiday in 2014, while in Hungary, Croatia and Romania this concerns more than 60 per cent.

Not surprisingly, people who are at risk of monetary poverty are also most likely to be deprived of holidays away from home: 70 per cent of them cannot afford holidays. But even among those who are not poor in monetary terms, a third is deprived of holidays away from home.

However, the situation is improving in many countries. Since 2008, the share of people not affording holidays away from home has decreased in 15 EU Member States: especially in Poland (11 pp.), Malta (10 pp.), Portugal (9 pp.), Austria (9 pp.), and Bulgaria (9 pp.). Furthermore, after an initial increase in the share from 2008 to 2010 in the Baltic countries, the share has since then fallen in Lithuania by 20, in Latvia by 18 and in Estonia by 16 percentage points. This development can be considered a real improvement in living conditions of these people, but it still leaves us many to be worried about.

After the holdidays … Evidence in Focus will be back in September. We wish you a great summer!

Author M. Vaalavuo is a socio-economic analyst in the unit of Thematic Analysis of DG EMPL

The views expressed in this article are those of the authors and do not necessarily reflect the views of the European Commission.

Editor’s note: this article is part of a regular series called “Evidence in focus“, which will put the spotlight on key findings from past and on-going research at DG EMPL

European Health Insurance Card

European Health Insurance Card

What is the European Health Insurance Card?

A free card that gives you access to medically necessary, state-provided healthcare during a temporary stay in any of the 28 EU countries, Iceland, Lichtenstein, Norway and Switzerland, under the same conditions and at the same cost (free in some countries) as people insured in that country.

Cards are issued by your national health insurance provider.

Important – the European Health Insurance Card:

  • is not an alternative to travel insurance. It does not cover any private healthcare or costs such as a return flight to your home country or lost/stolen property,
  • does not cover your costs if you are travelling for the express purpose ofobtaining medical treatment,
  • does not guarantee free services. As each country’s healthcare system is different services that cost nothing at home might not be free in another country.

Please note: when you move your habitual residence to another country, you should register with the S1 form instead of using the EHIC to receive medical care in your new country of habitual residence.