Jemima was booked to travel to Italy in May 2020 for a two-week tour of the major landmarks and attractions.
In mid-March, Jemima decided to cancel her trip, as Italy had become a major hot-spot for the Covid-19 pandemic. Jemima made a claim to her travel insurer for the cost of her flights and the tour.
Jemima’s insurer declined her claim because there was an exclusion in the policy for claims arising directly or indirectly from government interference with the insured’s travel plans. The insurer noted that Italy had gone into a nationwide lockdown on 9 March 2020, before Jemima cancelled her trip, which would have interfered with her plans.
Jemima looked at the Italian government’s lockdown announcement on 9 March 2020. She thought the government interference exclusion shouldn’t apply to her claim because:
- according to the announcement, the restrictions were only effective until 3 April 2020, so they would end before her departure date.
- the restrictions in the announcement didn’t technically close the borders to foreigners, so she still could have travelled to Italy on her departure date.
- she cancelled her trip solely due to health concerns about Covid-19 rather than any government restrictions.
The insurer declined the claim again. The insurer told Jemima the restrictions would have interfered with her travel plans because, although the borders were technically not closed to foreigners, no one could travel within Italy without a valid work or health reason. The insurer noted the restrictions were extended beyond Jemima’s departure date. Finally, the insurer said the exclusion applied regardless of Jemima’s primary reason for cancelling the trip.
We reviewed the Italian government’s announcement on 9 March 2020.
We agreed with the insurer, that although the borders weren’t technically closed to foreigners, the restrictions would have interfered with Jemima’s travel plans. The tour couldn’t take place under the restrictions because no one could travel within Italy or gather in groups in public spaces.
Although the announcement said the restrictions were effective until 3 April 2020, the wording in the announcement suggested that restrictions would be ongoing for some time as:
- the announcement was already an extension and variation of previous restrictions, suggesting further extensions were possible
- Italy had declared a six-month state of emergency from 31 January 2020, showing some restrictions would be in place until at least the end of July 2020
- reference to the evolving epidemiological situation, suggesting Italy’s response to the pandemic was ongoing as circumstances required
- reference to ensuing uniformity internationally and in Europe. Many countries around the world and in Europe were closing their borders and restricting travel until further notice.
We also noted that Italy was one of countries worst affected by Covid-19 in the world, with cases rising by over 1,000 new infections a day.
In all the circumstances, when Italy began its lockdown on 9 March 2020, it appeared likely travel restrictions would extend beyond Jemima’s travel dates in May, and they in fact did.
Although we accepted Jemima’s reason for cancelling her trip was health concerns, we were satisfied on the wording of the exclusion, Jemima’s claim arose directly or indirectly with the Italian government’s interferences with her travel, associated with those health concerns.
We issued a decision explaining to Jemima that insurers are entitled to decline claims where an exclusion applies because that is how they manage their risk, whether obvious or more finely balanced. We found that the complaint should not be upheld.
Insights for consumers
Loss arising from Covid-19 may not be covered, even if there is no specific pandemic exclusion in your policy, if another exclusion applies.