Wedding insurance after Covid cancelled nuptials

The Covid-19 pandemic disrupted many aspects of people’s lives and weddings were no exception. 

More than 260,000 weddings were postponed or cancelled in 2020 after the first national lockdown was imposed in March.

These postponements and cancellations meant there was a huge surge in interest in wedding insurance, which had been previously seen as a niche product bought only by a minority of those getting hitched.

With the threat of an imminent global pandemic, suddenly the market woke up and realised [the] importance [of wedding insurance].

Adam Leyton, Compareweddinginsurance website

“The Covid period was certainly an interesting time for wedding insurance for both consumers and underwriters,” says Adam Leyton, director of the Compareweddinginsurance website.

“We’re always communicating the benefits of wedding insurance – explaining what it covers and constantly challenging the preconception that it’s only there for if one of you changes your mind – something that it doesn’t actually cover. With the threat of an imminent global pandemic, suddenly the market woke up and realised its importance. .

“In a three-week period in March 2020, we received a year’s worth of visitors to the website, all urgently looking to buy cover. However, as demand surged, products began to be rapidly withdrawn. Underwriters were understandably nervous about offering £5,000 of cancellation cover for just £16.99.

“At that time, we had seven insurers on our panel, which then decreased to just one.”

John Lewis Insurance stopped offering new policies to customers in 2020 and officially removed wedding insurance from its services in 2021.

A torrent of claims from couples whose dream day had been ruined by Covid restrictions followed the surge in interest.

However, wedding insurance was one of the areas where policy wordings were ambiguous, leading to many claims being denied and consumers complaining to the Financial Ombudsman Service.

During the 2020 to 2021 financial year, the Financial Ombudsman saw an increase of 240% in complaints about travel and special events insurance, where consumers had been affected by cancellations and restrictions. 

It was wedding insurance that had the highest uphold rate, with 94% of complaints to the ombudsman upheld.

The amount of complaints dropped the following year, although wedding insurance still came top of the uphold list with 66%.

Fine print

Steve Wardlaw, chairman of insurer Emerald Life, says: “It was a bit of a piecemeal insurance contract, but it did say that it would pay out in the event that your venue was closed by infection or had been closed by the local authority. 

“That really was designed for things like someone having Legionnaires’ Disease in the air conditioning. It was never designed to pay out if there was a national shutdown.

[The pandemic] exclusion [in insurance policies] meant most claims that were brought as a result of the pandemic and lockdown were not valid under the terms of the policy. This had a profound impact.

Adam Underhill, Voyage Insurance Services

“The issue was that because it wasn’t designed that way, the exclusion wasn’t clear enough. So most insurers paid out on claims because the Financial Ombudsman Service said it wasn’t a sufficiently clear exclusion. Nobody went under, but wedding insurance disappeared for a couple of years.”

However, others in the wedding insurance sector contend that many policies had a pandemic exclusion in their list of general exclusions.

Adam Underhill, marketing director at Voyage Insurance Services, which counts Dreamsaver Wedding Insurance among its brands, says: “This exclusion meant that most claims that were brought as a result of the pandemic and lockdown were not valid under the terms of the policy. 

“This, of course, had a profound impact on those couples who had bought wedding insurance to protect their special day.

“Due to lockdown being a unilateral decision by the government, and feeling that couples who had bought their policies in good faith were being left without the benefits of the policy, we negotiated with our insurers to allow customers to push back the dates on their policies and keep them in force until a time when it was possible to have weddings again.

“This proved hugely successful, keeping thousands of couples on cover throughout the various stages of lockdown and the pandemic.”

Weddings return

The end of government restrictions on social events meant pent-up demand for weddings was unleashed as the couples who had been forced to wait for their nuptials could finally plan for their big day. 

In addition, thousands more had got engaged during the pandemic.

The experience of the pandemic had taught many of these people the value of wedding cover, especially while the risk of restrictions being imposed yet again was a genuine fear.

People are now aware that there are reasons why a wedding might go wrong. Although Covid was a very expensive lesson for insurers, it did educate people on why they might want wedding insurance.

Steve Wardlaw, Emerald Life

Wardlaw says: “It has come back quite well; the events covered are largely the same and, as more people are coming back into the market, we are seeing some distinctions. There are two tiers of cover with different levels of sub-limits. 

“For all of them, cancellation is covered but, for damage to wedding attire, damage to gifts, it will be down to what the couple want to pay for as to the sub-limits.

“The only significant change is the national lockdown exclusion; we are a little bit tighter on failure of supplier – that was other thing there was a concern about. If you take a policy, you can’t claim for the financial failure of a supplier within the first 14 days.

“Our current high limit for cancellation is £80,000; we are definitely in discussions with our underwriters to raise that, particularly for multi-event weddings. A lot more people at the lower end of the scale, £10,000 to £15,000, are taking the insurance. 

“In the old days, people might have seen it as an esoteric type of insurance, but that’s gone.

“People are now aware that there are reasons why a wedding might go wrong. Although Covid was a very expensive lesson for insurers, it did educate people on why they might want wedding insurance.”

Shake-up of players

Pre-pandemic UK General (now Bspoke) was the dominant insurer in the wedding sector and underwrote most of the market.

Underhill says: “Obviously the pandemic massively impacted this insurer, so much so that when the restrictions eased, they were unable to write this product, and most companies in the market were looking for new capacity to underwrite their products. This introduced a number of new insurers into the market.

“These new insurers took the time to review wordings and tighten them up with stricter definitions. Similarly, insurers increased the inception limits on policies, meaning couples cannot take out policies if they are too close to their ceremony date.”

According to Compareweddinginsurance, by October 2020, the sector began to settle, and products started re-entering the market. 

However, its data shows premiums were around three times greater than pre-Covid levels, at an average premium of about £150 compared to £50 before March 2020.

Over the past year or two, increasing competition has led to a slight decrease in the average premium, which is now around £135, the website’s data shows.

Wardlaw adds: “It is 50% to 60% more expensive now, but the levels have gone up because, since Covid, we have had the cost of living, energy prices and rent prices all going up.”

Most Emerald Life policies provide around £40,000 to £60,000 of coverage, although there are a significant number at the higher end, according to Wardlaw.

Dreamweaver reports £20,000 and £30,000 are the most common levels of cancellation cover, which retail at £83 and £130 respectively for the base policy.

While the pricing of wedding insurance altered drastically during the pandemic, changes to the policy coverage since the end of Covid restrictions has been more nuanced. 

It remains a relatively basic product, with much of the cover pre-pandemic remaining, barring the tightening up of wordings and definitions, according to Underhill.

He adds: “When we were looking for a new capacity for Dreamsaver Wedding Insurance, we were adamant that we wanted to keep the product as it was before. The only real exception was a Covid-19 cover option that enhanced the cancellation cover.

“Since then, we have further innovated the product with multi-event cover, allowing for up to six wedding events to be covered, which is great for religions where there are more than a ceremony and reception. 

“It’s also useful for those getting married abroad who have another event when they return, for friends and family who couldn’t attend.”

Nuptials in the sun

The end of Covid restrictions meant not only the return of wedding ceremonies but also a big increase in people travelling abroad. So it was only natural that destination weddings would also make a comeback.

Wedding insurance still provides suitable cover for international weddings and the costs are broadly the same. 

There are some add-ons for international weddings, and some people choose to increase their public liability cover – although this is not available for the US and Canada.

When claims happen [for weddings], they are usually serious and upsetting. Because Covid brought a focus on wedding insurance, people understand what can be done for them now.

Steve Wardlaw, Emerald Life

Wardlaw says: “Wedding insurance is event-based rather than travelling to the event-based, so travel is not covered under a wedding policy. We’re looking at that, but it is very difficult to work out for the price. It would be a lot more expensive if we had to hand tailor a product.

“We don’t get many claims because people really don’t want to cancel a wedding. Everyone is flying in, everything has been sorted and it takes 18 months to organise a wedding, so you don’t want to do it again. When claims happen they are usually serious and upsetting. 

“Because Covid brought a focus on wedding insurance, people understand what can be done for them now.”

Clearly while the cost of wedding insurance may have doubled since the pandemic, at least clarity of the value is now in sharp focus.