Compare Online

Travel Insurance- Where Theft is the Least of your Worries

Thinking of escaping what could be the wettest British summer on record? Well, it really shouldn’t need saying, but say it I will- buying travel insurance is an essential part of planning a holiday abroad. Despite its necessity, a recent Norwich Union survey found that 25% of UK holidaymakers travelled without any insurance, with those intrepid but foolish men being far worse offenders than women.

If you think that a few pairs of shorts, t-shirts and flip-flops aren’t worth the price of the premium- think again. Theft and lost baggage may be an inconvenience, but there are many worse things that can happen while far away from home.

Medicine With Frontiers

When questioned about reasons for a claim, almost half of those surveyed reckoned lost, stolen or damaged baggage would be the most likely; but this is incorrect. In fact, medical emergency is the most common reason- Norwich Union paid out over £23m in 2006, with £1,200 being the average claim amount. Once the costs of both medical care abroad and emergency passage back to the UK are factored in, the potential costs become frightening. Insurers FirstAssist reckon an ordinary scheduled flight back from the Mediterranean with doctor escort will cost between £1,800 and £4,000, while an air ambulance from the US will see no change from £30,000.

The minimum level of medical emergency cover you should be looking for from any travel insurance policy is £2m- though this may well need to be upped for older travellers- Age Concern’s travel policy has a £10m limit.

Feeling Excluded

Members of Parliament, revelling as ever in playing the role of consumer champions, slammed the Travel Insurance Industry earlier this year for ‘hiding’ exclusions in their policy smallprint. The Treasury select committee stated in its report that Travel Agents were the worst culprits. Bundling up insurance with the holiday itself was seen as a large part of the reason for ‘insufficient awareness’ amongst consumers.

It’s true, purchasing travel insurance doesn’t necessarily guarantee cover in all situations- as with any insurance product, exclusions in the policy need to be examined before any unusual trip or activity is contemplated.

Entering the Danger Zone

Most travel insurance policies will exclude from cover countries the Foreign and Commonwealth Office (FCO) has advised against travelling to. As at June 2007, there were 45 countries listed on the FCO website as either ‘all’ or ‘all but essential’ travel being advised against. War zones such as Somalia and Iraq are blindingly obvious no-go areas, but it should be noted that parts of more popular destinations like India and Russia have been proscribed.

Actually, the FCO site is a useful compendium of up-to-date local knowledge and travel tips for any country in the world. For example, did you know that in the Ivory Coast “grass or leaves strewn in the carriageway often means an accident or other hazard ahead”? Now you do.

Of course, in today’s uncertain world the threat of terrorism can strike anywhere, and most travel policies will exclude from cover losses stemming from terrorist acts. More than 40 British holidaymakers have been killed in terrorist attacks around the world since 9/11, with many more receiving serious injuries. One might expect the government to pick up the pieces if the worst happened on holiday, but sadly the Criminal Injuries Compensation Authority only compensates victims hurt in the UK. The result - many have been left to fend for themselves, or are reliant on the generosity of others to help them heal their lives. However, at least one insurer (InsureandGo) has recently broken ranks and included all terrorism-related losses in their standard travel cover. It is unusual for companies to compete for business directly on exclusions (rather than premium cost) in this manner- but it’s a trend that may continue.

The good news is that your policy should pay for extra costs if you are taken hostage or kidnapped during your travels- obviously, filling out those claim forms will be the first thing on your mind upon regaining freedom. And the bad news? You need to be missing for a whole month before they’ll shell out for a relative or close friend to travel out to the last place you were seen.

Pre-Existing Medical Conditions- Honesty Pays

Excluding pre-existing medical conditions from cover was high on the list of MP’s gripes in the select committee report- and a quick look at the Financial Ombudsman’s website shows that this form of exclusion provides by far the highest number of consumer complaints. The golden rule is always to be honest and let your insurer know of any medical conditions you may have. The reaction you get may differ depending on the insurer- they may choose to exclude from cover that specific condition, or to cover you for an extra premium. For example, Endsleigh’s travel policy is relatively generous, covering all conditions suffered for over 12 months and “which you have effective control of through regular drug treatment'’.

Pregnancy is one condition virtually all insurers will run shy of covering. All claims “directly or indirectly” to pregnancy or childbirth will be excluded as standard on most policies. Also excluded will be all HIV/AIDS related claims- whether pre-existing or contracted during the trip. Insurers have no wish to needlessly expose themselves here to millions of pounds worth of cutting-edge treatment programmes.

Age Discrimination

Another ‘pre-existing condition’ your insurer may have qualms about is your age- over 65 is generally seen by the industry as a high-risk area due to the greater likelihood of costly medical complications. As mentioned above, cover will need to be raised significantly from the £2m limit seen as sufficient for younger travellers. Cover should always be available, but premium hikes of up to 100% can be expected on older travellers’ 66th birthday, with further increases at 70. Shopping around, and considering the use of specialist insurers such as Saga and Age Concern should definitely be a priority here.

Sport or Endangerment?

People these days- they’re so easily bored. It seems they can’t just sit back and relax on holiday, but are constantly looking where they can get their next adrenaline fix…whilst injury from most ‘normal’ leisure activities will be covered by your travel policy, dangerous sports will usually be excluded.

Just what activities the insurance industry classifies as ‘dangerous’ shifts as quickly as our capacity to think new ones up. One policy document I examined went into fine detail, for example requiring extra premiums for both Zorbing (rolling down a hill inside a PVC sphere) and Via Ferrata (not the fine Yorkshire pastime of ferret-legging, but a form of mountain walking), but thankfully not for Wadi Bashing.

Putting Yourself in Harm’s Way

Most policies will exclude from cover incidents resulting from alcohol or drug intoxication. This seems sensible enough, but can be extremely wide ranging when considering the more lax attitude to drinking around the clock that prevails on holiday. Recently, one UK insurer even used this clause to refuse a claim from a woman who had to curtail her holiday and fly home when she got news that her father had been unexpectedly admitted to hospital. He was suffering from liver disease – the result of years of alcohol abuse. Thankfully, the Ombudsman upheld her complaint, saying the exclusion should refer to the person named on the policy only. Incidentally, specialist providers can insure those having a long-term problem with alcohol abuse- it would be classified as a pre-existing condition and the premium adjusted upwards accordingly.

In the same vein, insurers will exclude all claims from self-exposure to needless peril- including any attempted suicide. This exclusion will only be waived if attempting to save other human life (I’m afraid stranded animals will need to be left to fend for themselves).

Hopefully none of this has put you off travelling abroad for good- chances are you won’t need to claim on your insurance for any reason. It’s just worth remembering the cover that’s there if the worst does happen.

Click here to obtain quotes from leading travel insurance providers.