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Law360, London (April 1, 2020, 3:10 PM BST ) Almost half of major insurers in the U.K. have pulled their travel insurance products due to the chaos caused by the coronavirus outbreak, a consumer rights group said Wednesday.
Lobby group Which? surveyed 75 of Britain's major insurers and found that 31 have suspended the sale of travel cover to new customers because of the coronavirus crisis. Leading insurers such as Aviva, LV= and Direct Line are among the insurers who have pulled products, Which? said.
"Coronavirus has had a huge impact on the travel insurance market, with dozens of providers amending policies or pulling them altogether," said Gareth Shaw, head of money at Which?
He added that the mass exodus is creating confusion and uncertainty for consumers.
"The government, insurers and the travel industry must work together to tackle the huge challenge posed by coronavirus, to ensure people feel confident enough to travel in the knowledge that they will be covered," Shaw said.
A further 13 insurers, including Axa, have changed certain aspects of their travel cover to make the policies more restrictive.
Which? said customers who had existing cover and who booked trips before the outbreak should still be able to claim for non-refundable costs associated with the virus.
But for new customers looking to buy cover, there is a "shrinking pool of providers offering cover for travel," the lobby group said.
Which? said it is also concerned that insurers are using little-known exclusions to refuse cover for customers who have lost out due to coronavirus. The lobby group said they fear insurers are treating coronavirus claims unfairly.
The group said it wants insurers to "work closely with the government and wider travel industry" to make sure people are being offered adequate cover. They also advised consumers to double check policy deals when purchasing travel insurance.
Regulators, lawmakers and lobby groups have expressed concerns about how insurers are handling the crisis.
The Central Bank of Ireland instructed insurers to prioritize the interests of consumers after being called on to intervene by a consumer rights group.
British lawmakers have urged insurers to clarify their positions on coverage during the coronavirus outbreak, as losses caused by the pandemic mount and confusion spreads among consumers.
Britain's Financial Conduct Authority wrote to insurers this month urging them to show fairness and flexibility when assessing claims related to the coronavirus.
--Additional reporting by Najiyya Budaly. Editing by Katherine Rautenberg.
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