Insurance must include Covid cover to get top Defaqto 5 Star Rating

11 May 2021

One in five (21%) insurance policies do not cover cancellation costs for a positive Covid test.

  • One in five (21%) insurance policies do not cover cancellation costs for a positive Covid test
  • Only 37% cover cancellation costs if the policyholder has to isolate
  • One in 20 (2%) insurance policies has no cover for Covid-related medical expenses
  • Only 25% of travel insurance policies now have a Defaqto 5 Star Rating


With the news that we may be able to travel again soon under a traffic light system, millions of Brits will start planning their getaway. However, the threat of catching Covid is still serious and booking a holiday has been very risky, until now. As Defaqto, the independent financial information experts, have now made it compulsory for travel insurers to include Covid cover to get their top 5 Star Rating.

All travel insurance policies in the UK are given a Star Rating by Defaqto from one to five, with the top 5 Star Rating only awarded to the most comprehensive products. Defaqto’s team of analysts review everything that an insurance policy should cover and define a list of ‘core criteria’ that a product must include to get the top Star Ratings.  The core criteria always specify a minimum level requirement, for example at least £1 million for medical expenses and £1,000 for cancellation costs.

Most travel insurance products now include some cover for Covid-19 but there are big differences between what each policy covers. At present, one in 20 (2%) insurance policies have no cover for Covid-related medical expenses. Given that there is no free NHS outside the UK and medical care can run to tens of thousands of pounds, this is the most important cover for most travellers.

If you catch Covid before your holiday and are not allowed to travel, you could be left footing the bill for a holiday you can’t take. One in five (21%) do not cover as standard cancellation costs due to a positive Covid test. Likewise if you come into contact with someone with Covid, have to isolate as a result and are unable to travel, only 37% would cover your cancellation costs.

COVID-19 cover in travel insurance*

Cover Provided as Standard (%)

Annual Multi Trip

Single Trip

Extended Stay


(of three policy types)

COVID19 Medical Covered





COVID19 Cancellation Positive Test





COVID19 Cancellation Lockdown





COVID19 Cancellation Isolate





COVID19 Cancellation FCDO Advice





COVID19 Cancellation Unable to Stay





COVID19 Cancellation Denied Boarding





COVID19 Extended Stay Denied Boarding





COVID19 Quarantine Abroad






To make it easier for consumers to choose the right product for them, all travel insurance products, including single trip, annual, gap year, winter sports and cruise cover, must now include cover for Covid-related claims to be awarded a 5 Star Rating. Specifically, the insurance must include cover for any Covid-19 medical expenses, so that if you catch Covid while away and need medical treatment, these costs will be covered by your insurance. The policy must also include cover for cancellation following a positive Covid-19 test. This means that if you have to cancel your holiday because you test positive before you travel, these expenses will be covered by your insurance.

Anna-Marie Duthie, Travel Insurance Expert at Defaqto, comments:

“The role of travel insurance has fundamentally changed in the pandemic. Holidaymakers planning their travel this summer should not assume that their travel insurer will pick up the tab if plans go wrong due to Covid. We will be living with Covid for a long time and when we can travel again, there are many different scenarios which could have an impact on the trip. Travellers therefore need to be confident that they have chosen the right insurance to protect them.

“Unfortunately, not all travel insurance includes Covid cover and we cannot justify giving our top 5 Star Rating to any policy without it.  There are different types of Covid cover in the market but to get a 5 Star Defaqto rating, the policy must cover both medical expenses for contracting Covid whilst abroad and cancellation costs for catching Covid before you travel. We hope that by making this distinction we can give people confidence to choose a product that will cover them for travel in the post-Covid world.”

These changes took effect on 1 February 2021 and all policies with a 5 Star Rating from this date, must have both cover for Covid-related medical expenses and Covid-related cancellation. All travel insurance products with a 4 Star Rating from Defaqto must have cover for Covid-related medical expenses but not cancellation. Holidaymakers are reminded to check the terms and conditions of their policy to ensure they have the right cover for their needs before buying.

To see all travel insurance products and their Defaqto Star Ratings, visit:

Product data taken from Defaqto Matrix on 10 May 2021 


Notes to editors

*COVID-19 cover in travel insurance table detail

Before you travel

  • COVID19 Cancellation Positive Test

The insurer will pay for the cost of your trip (accommodation, transport charges, and trip expenses), up to the policy’s limit, if you receive a positive Covid-19 test before you travel and therefore must cancel. It is normal practice for this to come into force only when all other appropriate avenues, for example, obtaining a rebooking or refund from the trip or payment provider, have been exhausted and unsuccessful.

  • COVID19 Cancellation Lockdown

As above the insurer will pay for the cost of your trip should you need to cancel due to being placed into lockdown. This is before you travel and means your home area has been placed into a formal lockdown, whether that be local, regional or national and you therefore cannot travel.

  • COVID19 Cancellation Isolate

The insurer will pay for the cost of your trip should you need to cancel due to formally being placed into isolation at home, before you travel. For example, you are contacted by the track and trace service.

  • COVID19 Cancellation FCDO Advice

The insurer will pay for the cost of your trip should you need to cancel due to the FCDO changing their advice on travel to your destination as long as this happened after you have booked the trip but before you are due to commence your holiday.

  • COVID19 Cancellation Unable to Stay

If your trip accommodation was going to be a family or friends’ home and they either are diagnosed with Covid-19, have been placed into lockdown or told to isolate, and you therefore do not travel as planned due to having nowhere to stay, the insurer will pay for the cost of your trip as a result of needing to cancel.

  • COVID19 Cancellation Denied Boarding

Once you commence your trip at the outbound departure point you may be screened or tested for symptoms of Covid-19. Should you fail that test or for example have a temperature check, which displays as being high, you may be denied boarding and therefore be unable to leave your home country. Should you cancel because of this, the insurer will cover the costs of your trip as above.

Whilst Away

  • COVID19 Medical Covered

The insurer will cover any medical expenses incurred whilst on your trip, should you contract Covid-19 and need treatment.

  • COVID19 Extended Stay Denied Boarding

As above, on your return journey home, you may be screened or tested for symptoms of Covid-19 at your departure point. Should you therefore be denied boarding as a result, the insurer will cover the additional accommodation and/or travel expenses incurred, due to you having to stay longer than your scheduled return.

  • COVID19 Quarantine Abroad

Whilst you are on your trip, should there be an outbreak or confirmed case of Covid-19 in your locality and you have therefore potentially been exposed to Covid-19, you may be ordered by a government or public authority to be placed into quarantine. Should this mean you cannot return as planned, the insurer in this instance could either cover your additional accommodation costs and/or the cost to get you home.



Contact information

Newgate: Vanessa Chance/ Simone Fassom, / 020 3757 6870


About Defaqto:

Defaqto is a leading financial information, ratings and fintech business. Its unbiased fund and product information provided as expert Ratings, coupled with its market-leading software solutions helps consumers, financial institutions and financial advisers make better informed financial decisions.

Defaqto has been operating for over 25 years and works independently. Defaqto employs over 60 analysts spending 400 hours a day monitoring the market and analysing more than 43,000 financial products and funds in the UK, ensuring that the information provided is accurate and up to date.

Defaqto Star Ratings

Star Ratings allocate a product or proposition a rating of 1 to 5, depending on the quality it offers. With a 4 or 5 Star Rating indicating the most comprehensive offerings in the market.

Available through and Defaqto’s financial planning software, Engage Core, Defaqto Star Ratings provide an independent and unbiased industry standard for indicating where a product sits in the market in terms of feature quality and comprehensiveness. Consumers and financial advisers alike can see, at a glance, how comprehensive a financial product is.

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