MILLIONS of Brits face an insurance headache in the wake of the Covid-19 outbreak.
Many firms have already started to PULL products that might have otherwise have protected millions of us.
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While others are pointing to the small-print of policies that stop those off sick with the virus getting much needed funds.
Toby Harper of Harper James Solicitors urged Brits thinking they could rely on insurance to “urgently check the small-print of their documents”.
The details come two weeks after the Sun on Sunday revealed small businesses decimated by Covid-19 across the UK faced receiving no compensation whatsoever through insurers.
The three main insurance policies the average Brit tends to take out are life insurance, critical illness cover and income protection. Income protection is designed to help pay you a regular income if you can’t earn money due to illness or injury.
INCOME PROTECTION HIT
However the Association of British Insurers has now said the majority of policies WON’T pay out to people who are self-isolating.
In newly issued advice they say: “Self-isolation is only likely to be covered for those income protection policyholders where an individual has been advised to do so by a medical professional.”
Effectively this means those trying to make a claim could be asked to provide evidence, like a GP’s certificate, which instructs them to stay at home. The chances of someone getting that are close to zero.
If you’re taking out a new policy it’s now unlikely that you will be covered if you fall ill with coronavirus. And if a member of your household is unwell and you follow the Government’s advice by self-isolating, your policy won’t cover you.
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Critical illness cover offers a payout on the diagnosis of a particular illness. But policies are very unlikely to cover coronavirus unless they are specifically mentioned in the small-print.
Life insurance pays out when you die. A claim has to be made by the policyholder’s family once they pass away. Insurance firm Zurich has already said it is “likely” they would pay out in this case.
But other companies have yet to make their position clear.
95% OF FIRMS ‘WON’T PAY OUT’
Comparethemarket.com, a price comparison website, has temporarily stopped providing quotes for income protection cover until firms clarify their positions. The website said this would protect consumers from being led into buying policies that may no longer be suitable.
It said 95 per cent of the providers it worked with were no longer providing loss-of-income cover for new accident, sickness or unemployment policies, although it would not name specific brands.
GoCompare, another comparison website, said three times as many people were searching for income protection cover at the beginning of this week than they were during half-term in February.
Most major travel insurance firms started introducing specific Covid-19 exclusions in their policies last week or stopped selling travel cover altogether.
People are also anxiously checking wedding insurance policies — designed to pay out if you have to cancel a ceremony due to unforeseen circumstances.
Given that spring and early summer are the peak season for weddings, there will be a lot of people wanting to claim if they took out a policy. Yet couples are now being tied in knots by the wording in these insurance policies. Some firms are saying they will pay out if the cancellation is caused by “an outbreak of infectious or contagious disease”.
But because weddings have not been banned by the government, if the venue itself does not cancel the event the policy may not pay out.
John Lewis, for instance, said yesterday: “The current UK government position is that weddings are still permitted to take place. So if your wedding venue is still prepared to hold your wedding and you chose to cancel, then this would not be covered.”
