How will brexit affect Australian Travellers?

---

---

A recent survey conducted by Comparetravelinsurance.com.au found that 28% of Australian travellers looking to visit Europe or the UK in the next 18 months are waiting until after Brexit to book their holidays.

With less than 3 weeks until Brexit, many travellers are concerned that expected interruptions will derail plans and leave them out of pocket.

 As the March 29 deadline approaches, we have received a flood of calls from travellers wanting to know whether Brexit will disrupt their UK and European holidays, and whether travel insurance will cover them.

Europe is one of the most expensive destinations for Australian travellers due to exchange rates and the vast distance. Warnings of flight cancellations, delays at border crossings and disruptions to pre-booked tours are particularly unsettling for travellers.

Holidaymakers report delaying their trips or considering alternative destinations altogether to avoid the uncertainty and potential costs.

I’ve been under a rock – what is Brexit?

In June 2016, the British people voted to leave the European Union, triggering a two-year withdrawal negotiation period on a range of issues. From movement of travellers and workers, to the border arrangements between Ireland and Northern Ireland, to the import of cheese, there is much to consider when decoupling from 45 years of marriage.

With two-year negotiation period finishing on March 29, 2019, many commentators are concerned that a ‘no-deal’ scenario is increasingly likely, or that the negotiation period will be extended.

What does a No-Deal Brexit mean?

A no-deal Brexit means that at midnight on March 29^th, there would be no agreements in place about what the relationship between the EU and UK would be. Transport and trade are likely to be significantly impacted, and border checks may be reintroduced.

will my travel insurance cover Brexit?

With Easter - a peak travel period for thousands of Aussies - just around the corner, travellers should be aware that ‘known event’ clauses may prevent you from successfully claiming for issues relating to Brexit.
 
Typically travel insurance only covers for the unexpected – not an event we’ve known about for two years – so it’s a bit of a grey area as to whether insurers will cover Brexit claims. The ambiguity comes from the fact that while we’ve known Brexit is coming, we also still have no idea what kind of Brexit it is going to be and what impact it will have on travel.

Will Brexit affect my flights?

It depends who you ask. The International Air Transportation Association has warned that in the event of a no-deal Brexit, some 5 million seats are at risk of being cancelled. Similarly, the European Regions Airlines Association has estimated that 1.6 million routes across Europe will be affected in a no-deal Brexit, as well as aviation safety and border security.

The UK Department of Transport has said that in the event of a no-deal Brexit, it assumes the UK will grant permission to EU airlines to continue operating in the UK, and expects reciprocal treatment, suggesting that cancellations and delays will be negligible.

Given the uncertainty, it's important travellers to understand what circumstances their travel insurance will cover to avoid disappointment.

In the event of flight delays or cancellations, the rules have not changed for travel insurance. Events outside of the airlines’ control, such as strikes, riots, and bad weather are likely to be covered. If a flight is delayed or cancelled where the airline is at fault, such as not having the appropriate permits to fly or not having enough pilots, then it is the airline’s responsibility to look after you.

Most airlines will book you on the next available flight and will offer accommodation or meal vouchers, but they are unlikely to assist you further if you miss a connecting flight with another airline.

If you’re travelling to Europe or the UK, allow yourself extra time at the airport for check-in and at customs to limit the impact of disruptions, and consider booking connecting flights with the same airline.

What might Brexit mean for the exchange rate?

At time of writing, the Pound was nearing a post-referendum high against the Australian Dollar due to speculation the Brexit negotiation date will be pushed back. But in the event of a no-deal Brexit, the unpredictability may send some traders towards more solid currencies, taking the value of the Pound with them.

Does this mean my holiday will be cheaper?

Well, maybe. A lower exchange rate would mean more bang for your buck generally. However, a Brexit of almost every design is predicted to slow down imports and make them more expensive. In January, major companies including McDonalds, Sainsbury’s and M&S all signed a letter to MPs highlighting the consequences to their customers. Their letter suggested that a third of food eaten in the UK comes from the EU, and the increased tariffs and slowed transit expected in a no-deal Brexit will reduce the availability and shelf life of many products in stores.

I’m a dual citizen – is there anything I need to know?

If you’re a British-Australian dual citizen, you may need an additional driving permit to drive around Europe. If you have a current European Health Insurance Card (EHIC), it will no longer be valid in a no-deal Brexit.

Dual citizens of Australia and the UK may find that they are no longer eligible for free healthcare throughout Ireland and mainland Europe, so it’s important to make sure you’re covered for the full duration of your trip.

If you’re already travelling and find yourself without cover, look into ‘Already Overseas Travel Insurance’, offered by just a handful of brands including 1Cover, DUinsure and TID.

These products often have age and waiting limits so familiarise yourself with the terms and conditions and any exclusions that apply.

Get to know the fine print

Going on any holiday without travel insurance is not a risk worth taking and keeping yourself informed is the best way to stay ahead of this Brexit madness. Follow your airline’s social media pages, make sure your contact details are up-to-date with your booking, and subscribe to updates from the Smartraveller website.

It is also more important than ever to read your Product Disclosure Statement carefully and be aware of exactly what you’re covered for in the event of delays.

---

Crystal Moran

With a research and journalism background, and certified in Tier 2 General Insurance General Advice, Crystal is passionate about investigating customers’ tricky travel questions and helping them find the answers they’re looking for. A writer and filmmaker whose favourite trips have been to film festivals in Cuba and South Korea, and campervanning around the USA, she loves getting to know new people and seeing a glimpse of the world through their eyes.