/ Travel & Leisure

Money clinic: refund for unused travel cover

Have you struggled to get a refund for travel cover you haven’t ended up using? Here are the steps you should take to get your money back.

A member and his wife got in touch with Which? Money when their trip to the Canary Islands last June was thwarted by the pandemic. They received a refund from Jet2 for the cancelled trip.

He already had travel insurance in place with his packaged back account, but his wife wasn’t insured so Jet2 arranged single-trip cover for them when they booked. They’ve since been told that it won’t refund the £50.00 premium paid, which the member believes in unreasonable as the insurance was booked specifically for that holiday.

Which? Money’s view

This is particularly disappointing because, as in your case, Jet2 has been very good at refunding the cost of holidays affected by COVID-19. It’s partly for this reason that the company is a Which? Recommended Provider of package holidays.

Jet2 told us:

“Travel insurance cover does not just apply when on holiday, as the policy is active and in use as soon as the policy is purchased”

That is correct – the customer would have been instantly able to claim for cancellation, for instance – but ignores the fact that they’ll never be able to use the full cover they paid for (such as for medical assistance abroad or repatriation).

When we surveyed 73 insurers in October about their COVID-19 cover, 63 would under some circumstances, partially refund premiums if the cover was cancelled

Jet2 Travel Insurance is arranged through Rock Travel Insurance Group, and we understand that the member has now made a formal complaint to Rock, which has been unsuccessful. They now have the option to appeal to the Financial Ombudsman Service (FOS), but must do so within six months from the date of Rock’s final response.

Making sure travellers get value from their insurance is on the agenda of the Financial Conduct Authority (FCA) and a priority for Which?.

If you’ve read this and also feel you’ve been let down by your insurer please do get in touch with us in the comments.

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I have an American Express Platinum Card, whose £575 annual fee covers many travel-related benefits, including travel insurance, Priority Pass airport lounge access and upgrades in hotel loyalty schemes. During the pandemic, these travel benefits have been worthless.

American Express usualy has plenty of offers on its cards – for example spend £100 at the likes of M&S, Apple, John Lewis or Selfridges, and get back £20 or £30. But to compensate customers for the travel-related benefits’ lack of value during the pandemic, Amex introduced some offers of spend £100 or £175 at certain merchants and get back 100% of the amount spent. So far, I’ve used these offers to acquire £375 of free gift cards from these large retailers, and enjoyed a £400 meal at a 5* hotel restaurant. So I feel I have been properly compensated for my travel insurance’s lack of value during the pandemic.

If you are going to go to the trouble to call out a company like Rock Travel [sic] Insurance Group, at least ensure you use the correct firm details, as registered with the Financial Conduct Authority. It is Rock Insurance Services Group. It doesn’t take five minutes to do this.

I have previously spoken to Which? about the slapdash way that you report on travel insurance, without carrying out a proper FCA search to find the registered name, all associated trading names and the underwriting insurer. This gives your reviews the illusion that you have considered multiple competing providers, whereas you are often recommending the same broker, insurer, repatriation services and policy terms and conditions.

In this case, Rock Insurance Services Group offer insurance under the trading names insurefor.com BigBlue Cover.com and MRL Insurance. Which? list all three as providing Low (COVID-19) Cover, although I do note you have temporarily withdrawn your travel insurance recommendations due to the uncertainty that COVID-19 has brought to the marketplace whilst insurers change their policies. But read on … .

It is more important than ever to carry out a proper search, since the UK has now left the EU and European Insurance companies that previously “passported” into the UK are now in a temporary permissions regime, whilst they may continue to offer new business to UK customers.

The FCA has this to say:

Consumers doing business with firms in the temporary permissions regime may wish to ask for further information from the firm about its complaints and compensation arrangements. A firm based in an EEA State, may not be covered by a compensation scheme or not to the same extent as a UK authorised firm. The right to refer a matter to a dispute resolution scheme may not exist or may be more difficult for a UK customer to use.

So the automatic right to appeal to the Financial Ombudsman Service (FOS) may or may not apply or be effective, at least for some travel policies taken out since January 2021. Maybe Which? should urgently review its travel insurance pages.

Policies issued by Rock Insurance trading as insurefor.com are currently insured with Euroins AD, based in Bulgaria, by the way.

We had arranged for a single trip travel insurance for my husband and myself through Free Spirit Insurance. At the time of arranging the insurance we were assured that cancellation claims would be considered in the event of coronavirus. As it turned out because of the virus, our holiday was cancelled and we made a claim on this travel policy for the £5,000 we had paid for the holiday. The claim was turned down flat by Free Spirit and eventually we heard that the holiday company went into administration and were contacted by Atol to say that we could claim under their scheme; as it turned out we had to make a charge back with our credit card company for a refund which we eventually got.
We had already paid an insurance premium of £513 to Free Spirit insurance for this 16 day holiday that didn’t happen (it was a loaded premium due to my husband’s medical history) and so we decided to apply to the insurance company for at least a refund of the premium – we would have been happy with half of it back. They advised us that their policy wording states that as we had tried to claim cancellation costs for the actual holiday they could not consider any refund of premium even though the claim was turned down. We appealed to the Ombudsman in July last year and nothing has been done about it regardless of how many times we have emailed.

The FOS (Ombudsman) is still working through a backlog of cases. I logged mine against the same underwriter and claims handler who deal with Free Spirit Insurance in April 2020 – before the flood of new Covid-19 cases. I have just heard from the FOS within the last month.

if your holi day was cancelled by the company, then your insurance co. is quite right to refuse.
you are automatically entitled to get your money back from the travel company. although it may take ages to get .
otherwise you would be getting paid twice.

I have just cancelled an AA European breakdown cover insurance – an annual policy, not a single trip insurance. I had to as the vehicle has been exported and they will not cover non-UK registered vehicles. I also cancelled my motor insurance for the same reason. The motor insurer (NFU – who are fantastic ) in accordance with normal insurance practice give a pro-rata refund for the balance of the policy year. But the AA say they give no refunds. They keep a full years premium for six months of cover. It is in their terms and conditions – but what outrageous terms! Trying to discuss the reasonableness of this with them is impossible, they just keep parroting “it’s in the terms”. Not the first time I have had issues with the AA and its Ts&Cs. Their terms also say that if I file a complaint they will ‘try’ to respond within 8 weeks, but might take longer. WHICH? gives the AA a very high rating. I cannot share this view.

David – I can understand your annoyance, but insurance, especially motor insurance [including breakdown cover], is an extremely competitive market with a high turnover of policy holders. Because the basic covers are more or less standard across all policies, in order to attract new business, insurers find other ways to compete by tweaking the terms and conditions to offer something extra or to lower the premium. It is essential, therefore, to study the terms before accepting a policy to make sure they give the cover you want, including on conditions such as early termination, change of address, change of vehicle, and so on.

Breakdown cover is not strictly insurance but a service contract which is designed to be rolled over to another vehicle but not designed to be cancelled. You might have found a different breakdown service contract without the ‘no cancellation refund’ clause, but would it have been the same price or have other adverse conditions? I am afraid that if a restrictive provision is set out in the policy or contract document the customer is deemed to have read it and accepted the terms and conditions.

You praise NFU Mutual motor insurance. It is not noted for good value but is well-regarded for customer service. However, its claims handling has been shown to be unsatisfactory in some cases and a particular experience reported on this site was that the insurer wouldn’t go the extra mile to support a loyal customer.

I’m not sure you are right about European breakdown cover not being insurance. Maye domestic cover is just a service but the European product is different. The documentation for the product is very clear that is very clear that it is an insurance policy underwritten by an insurance company. Refunding pro rata premiums is a very standard feature of term insurance and if an insurance provider is going to divert from the norm then the ethical thing to do ( and the AA has long held itself out as an ethical provider) is to prominently alert consumers to non-standard and oppresive terms. I think it was Denning LJ many years ago who referred to some terms so dramatic that they should be highlighted in glowing red letters ; or words to that effect.

Their approach when I questioned the policy terms was also poor; quite unwilling to engage in any discussion. A meaningless apology which translated as ‘that’s tough; put up with it’.

As for NFU, if by good value you mean cheap then I have to agree. And I think they acknowledge this . But the whole NFU proposition appears to be to handle things a bit out of the mainstream in a personal way – not simply turning the handle on an automated sausage machine. I found them exceptional and able to deal with the proposition in front of them on its own merits rather than responding ‘computer says no’. They handled a high value motorhome, privately imported, with a second driver holding a European licence without a hitch and were creative in finding best options for premium and cover. I found them exceptional, the best insurer I have ever dealt with. When I had a claim that needed to be handled abroad they were helpful in sorting it out.

The AA regard what they offer as an insurance.

My son took out NFU car insurance. His car was stolen and the same day they provided both a courtesy car for 2 weeks and money to replace the child seat. The claim for the car was then settled quickly at a very good price after a little negotiation; worth doing your research by checking the dealer price for the same car, similar spec and mileage. So on that experience I’ll give them top marks. In his case and mine they also gave very competitive quotes – not maybe the cheapest but I think you get what you pay for. Cheap insurance may make you road legal but the test comes when they have to pay out.

David – Yes, I agree that breakdown cover is in fact a form of insurance. It protects you when something breaks down and provides different levels of cover according to the policy terms. Pay-outs on eligible claims are not limited to the amount paid as a premium – initially at least. The policies are also liable to insurance premium tax and the companies providing the cover are subject to regulation by both the Prudential Regulatory Authority and the Financial Conduct Authority. Nevertheless, they are free to determine their own terms and conditions within the scope of the law [which includes not having unfair contract terms].

I agree that the AA could have been more open about its cancellation terms but I don’t regard them as either exceptional or oppressive. I don’t think there is a norm although partial reimbursement in the event of cancellation might be the more common approach.

I agree with Malcolm that you certainly get what you pay for with insurance. I have used many different companies over the years and, as Malcolm says, the test is in the handling of claims. It is over forty years since I last made an insurance claim so I am in no position to judge nowadays. I tend to choose a mid-range and long-standing insurer, exclude many covers, and set high excesses, so to some extent I am self-insuring based on my own assessment of everyday risks.

There are hundreds of motor insurance companies, many of them not represented on comparison websites, so it is a formidable task to evaluate all the policies available. A good broker can assist and will probably know of more suitable insurers for specific or specialised requirements.

David – I agree with you that it unacceptable for the AA to take eight weeks or longer to respond to a complaint.

When taking out insurance or breakdown cover it is important to look at the terms & conditions. I am fed-up that none of the well known breakdown companies offers a no-claims discount, but I just have to accept that. The best value breakdown cover I have found has been to include it in my motor insurance and at present I am insured with NFU Mutual. It is important to compare the cover provided, but with only one car it is good value for me. I had a claim more than a year ago and I cannot fault the way that it was handled. Like Malcom’s son, I was provided with a courtesy car, delivered to my home when my car was collected for repair, and taken away when my car arrived home.

As John has mentioned, one of our regular contributors has been poorly treated by NFU.