LV= Suspends Sale of All Travel Insurance Due to Coronavirus

Insurance giant LV= is withdrawing all travel insurance policies from the market as the spread of coronavirus disrupts travel plans and closes borders.

LV= said it was halting the sale of travel cover rather than significantly increasing prices or restricting policies. 

The firm had seen a doubling of travel insurance sales over the last couple weeks, as travellers scrambled to financially protect themselves from cancelled flights and country-wide quarantines. 

Consumers who have already purchased policies through LV= will still be covered and existing customers will also be able to renew policies. However, sales are closed to new customers.

"In light of the impact that Coronavirus (COVID-19) is having globally, we've made the difficult decision to pause the sale of travel insurance to new customers,” the company said.

LV=, which used to be known as Liverpool Victoria, is primarily a provider of home and motor cover, with five million accounts, but sells a small number of travel insurance policies. The firm said it was making this decision to protect the viability of its other business.

“It's important for the long-term benefit of all our customers that our exposure to [the travel insurance] market remains at a sustainable level for the overall business,” a spokesperson said.

However, the firm stressed that it wasn’t exiting the travel insurance market. Rather the suspension of new sales is a “temporary measure” in response to “exceptional circumstances.”

Although LV= is the first company to suspend the sale of travel cover, other insurers have restricted policies in the wake of the outbreak. AA is no longer offering single-trip policies for Italy, France or Spain, and, Sportscover Direct, the largest online seller of insurance for sports holidays, has added a “coronavirus exclusion” to all its policies.

Aviva is no longer offering travel disruption or airspace closure cover to new customers.

The company said in a statement: "We have decided to adjust our cover to reflect the current risks posed by coronavirus. The outbreak of the coronavirus means there is an increased likelihood of disruption to people's travel plans."

Customers who purchased policies with Aviva before Monday will still retain cover but new policyholders won’t be able to claim for disrupted travel to countries the Foreign Office warns against visiting, which now includes China and Italy. However, if airlines cancel their flights, they can claim under “abandonment,” which should reimburse them for costs not recovered from the airline.