Travellers lose out as insurance stands still
Policies’ failure to keep up with the rise in gadgets makes claims pointless
Anna Mikhailova Published: 26 May 2013
Some travel insurance policies don’t cover children if they live partly with another parent (Jamie Grill)
HOLIDAYMAKERS have been urged to check the fine print of their travel insurance policies before jetting off this summer, to avoid being left unable to make a claim.
A study by Which?, the consumer group, has found that insurers have not updated the small print of their policies for years, failing to account for the rise in expensive items such as smartphones and tablets.
It has warned that nearly all the 20 large travel insurance companies in its survey had set unrealistically low limits on what people could claim, especially once the excess had been deducted. Many had a limit of £300, and four — Virgin Money, Axa, Columbus Direct and Insure and Go — had only £200. Mobile phones such as the iPhone cost more than £500 to replace.
The latest data from the Financial Ombudsman Service (FOS) shows there were 1,911 complaints against travel insurers in the nine months to the end of 2012. This compares with 1,860 over the same period in the previous year.
Earlier this month, the Financial Conduct Authority (FCA) announced a review of insurance — with a focus on travel cover.
Jeremy Cryer, head of travel at gocompare.com, the comparison website, said: “It is extremely important to read your policy documents to ensure you have the right level of cover for your holiday, and so you know the procedure for making a claim.”
He suggests taking at least two copies of your documents with you so you can keep one in your hotel and the other on you at all times.
Insurers are extremely careful about excluding pre-existing medical conditions. Indeed, even claims relating to cancelled or curtailed trips due to relatives’ pre-existing medical conditions are likely to be excluded.
James Lavers of Insurance Tailors, the specialist broker, said: “To include any condition, there will usually be additional underwriting to the insurer — usually over the phone so the insurer can understand the severity of the condition. There will most likely be an additional premium, which can be several times the amount of the original travel policy.”
Travelling against the advice of your doctor will usually be excluded from a policy. With pregnancy, coverage varies from provider to provider, so check the policy wording or consult a broker.
Lavers said: “Some [providers] cover only complications and not routine pregnancy treatments while abroad. Others will cover trips up to two months before the expected due date, or only with advice from a medical practitioner.”
Make sure you check the small print if you take part in any “extreme” sports, such as kite surfing. These can require an additional premium.
Graeme Trudgill of the British Insurance Brokers’ Association said: “Bear in mind travel exclusions are a minefield, with differing hazardous sports accepted by different providers and different attitudes to alcohol consumption in policy wordings.” He recommends consulting an insurance broker.
Cryer at Gocompare said: “Most policies will cover you only if you are wearing the appropriate safety equipment, such as a ski helmet. Failure to do so may result in your claim being rejected.”
Airline or company failure
Only 43% of policies cover the failure of an airline running scheduled flights, according to Defaqto, the data analyst. The average amount of cover for this is £2,500.
In the event that your airline runs into financial difficulty and ceases trading, you will be covered only if your policy provides scheduled airline failure insurance (SAFI). This is particularly relevant for anyone visiting exotic locations, where they may have to use local carriers.
Check for SAFI if you are not buying your holiday via a travel agent, as you may not have Atol or Abta protection and could face a big bill if the airline shuts down.
It is also worth knowing whether your policy covers you for the “financial failure” of a company related to your holiday as standard, and if there is a limit to the protection.
Make sure you check what your policy says about children travelling with you. Defaqto says there has been a change in insurers’ approaches to cover for children and stepchildren, with the latter often being excluded.
Brian Brown of Defaqto said: “In modern families, it is not uncommon for children to live with one or other parent. About 42% of insurers will not insure children as part of family cover if the child does not live permanently with the family. If a parent takes their child on holiday and the children live with the other parent, they must check very carefully to be sure their insurer will cover the children. It is quite likely that the traveller will need to take out separate cover.”
Don’t forget your European card
More than 3m people are holding European Health Insurance Cards (EHIC) that are due to expire this year, according to moneysavingexpert.com, the comparison website — leaving travellers at risk of footing the whole bill for treatment on the Continient.
The cards allow free or discounted access to state medical care in 27 EU countries and others. However, holidaymakers may still have to pay for treatment in some places, so it should not be seen as a replacement for travel insurance.
You can apply for a card through the NHS by calling 0300 330 1350, or online. Some websites will try to charge you for the service, but the cards are free for all UK residents. Every family member travelling requires a card. Children under 16 must be registered as dependents.