Consumer Duty and Travel Insurance

Why Consumer Duty matters for your holiday cover

The Consumer Duty is a major shift in UK financial regulation designed to set higher standards for the insurance industry. For travellers, this means that insurance companies must proactively act to deliver good outcomes, ensuring that policies are not just legal but are genuinely useful and transparent. It aims to prevent 'sludge' practices - unnecessary friction that makes it hard for customers to claim or cancel - and ensures that the price you pay reflects the actual value of the protection provided.

• Insurers must provide products that meet your specific needs
• Communications must be easy to understand without jargon
• Customer service must be as helpful when claiming as it is when selling
• Fair value must be demonstrated across all policy types
• Firms must monitor and prove they are delivering good outcomes

What is covered under the new standards

While the Consumer Duty does not change the specific perils listed in your policy, it changes how those benefits are explained and delivered. It ensures that the core components of travel insurance - such as emergency medical expenses, cancellation cover, and baggage protection - are presented clearly so you know exactly what you are buying. The Duty requires insurers to ensure that their target market (for example, senior travellers or those with medical conditions) is getting a product that actually works for their specific circumstances.

Understanding exclusions and what is not covered

Under the Consumer Duty, insurers are under pressure to ensure that exclusions are not hidden in small print or written in confusing legal language. If a policy excludes high-risk activities or specific pre-existing conditions, these must be highlighted clearly during the buying process. You should still be aware that standard exclusions usually apply, such as travelling against FCDO advice or claims related to being under the influence of alcohol, but the insurer must now ensure you are reasonably aware of these limitations before you pay.

Typical costs and pricing factors in 2026

The FCA requires insurers to demonstrate 'fair value', meaning the cost of the premium must be reasonable compared to the benefits provided. For a typical one-week trip to Europe in 2026, a healthy adult might expect to pay between £15 and £45 for a standard policy, while worldwide cover or policies for those with medical conditions will naturally be higher. Pricing is influenced by destination risk, the traveller's age, and the level of medical inflation, but the Duty prevents insurers from charging 'loyalty penalties' where existing customers pay significantly more than new ones.

• Age and health status remain primary pricing drivers
• Destination risk and local healthcare costs (e.g. USA vs Europe)
• Trip duration and the value of pre-booked excursions
• The level of excess you choose to pay in the event of a claim

Choosing cover for pre-existing conditions

One of the most significant impacts of the Consumer Duty is on travellers with pre-existing medical conditions. Insurers are now required to ensure that these customers are not unfairly excluded from the market and are directed toward specialist providers if a standard policy isn't suitable. When choosing cover, you must be honest about your medical history, but you can now expect the screening process to be more intuitive and the outcomes to be explained more clearly to avoid 'protection gaps' where you think you are covered but are not.

Claims, evidence, and the support process

The Duty mandates that the claims process should be straightforward and that customers should not face unreasonable barriers when trying to use their insurance. If you need to claim, you will still need to provide evidence such as police reports for theft or medical certificates for illness. However, the insurer must provide adequate support throughout the process. If a claim is rejected, the reason must be explained clearly in plain English, and you must be informed of your right to contact the Financial Ombudsman Service.

• Keep all receipts and invoices for emergency expenses
• Obtain written confirmation for any travel delays or cancellations
• Report thefts to local police within 24 hours and get a crime reference
• Contact your insurer's medical emergency line before starting treatment
• Ensure all medical declarations are accurate to avoid claim rejection

Regulatory context: FCDO and the FCA

The relationship between the Foreign, Commonwealth and Development Office (FCDO) advice and your insurance remains critical. Most policies are void if you travel to a country where the FCDO advises against all or all but essential travel. The Consumer Duty reinforces that insurers must make this restriction clear. Furthermore, while the Global Health Insurance Card (GHIC) provides some cover in the EU, the FCA expects insurers to explain that a GHIC is not a substitute for comprehensive travel insurance, which covers repatriation and private care.

Practical checklist for the modern traveller

To benefit fully from the protections offered by the Consumer Duty, travellers should take an active role in reviewing their policy. Ensure you have read the Insurance Product Information Document (IPID), which is a simplified summary required by law. Check that your destination and all planned activities are included, and verify that the cancellation limit covers the full cost of your holiday. If you find any part of the policy confusing, the Duty requires the insurer's customer service team to provide clear answers to help you make an informed decision.