The scandal of travel insurance

[FlyingOfficerKite]

When you take out insurance, of whatever kind, the words that come to mind that describe the service you expect include 'piece of mind', 'comprehensive' and 'safety net'.

The people travelling home as a result of the current travel chaos are likely to have a far different view. Words they might use would be 'small print', 'exclusion clauses' and 'limited cover'.

Over the years I have claimed several times against travel insurance policies and, without exception, have found them seriously wanting.

Who would know, for example, if you claim for an article which has a value in excess of £50.00, you need a purchase receipt! I didn't the first time I claimed. Or that it would take 12 months to settle a claim who's value was less than £500.00.

When there is a natural disaster, at a time when insurance cover is at a premium, where are the insurance companies? - The answer running for cover and hiding behind exclusion clauses.

All people want when they are in trouble is support and confidence that the money they have spent covering their travel will have been well-spent and of value.

Travel insurance is, it seems, sadly lacking and without intrinsic value just when you need it the most.

To call current travel insurance cover a 'scam' may be putting to great a emphasis on the present arrangements. However, some may not agree.

KR

FOK

[ATNotts]

I'm sure many will be horrified, but when travelling within mainland Europe, I don't ever take travel insurance.

The EHIC card will ensure I'm looked after in the event I become ill, and with all the hoops you have to go through to make a successful claim against a travel insurance policy you're probably better off saving up the premiums you would have paid, and bite the bullet in the event you are robbed, lose baggage or get delayed.

I'm not so stupid as to travel outside the EU without insurance, simply for the medical cover - which begs the questions, why can't you just get medical cover, with out the delay insurances, missed departure, baggage etc?

[JEM60]

Only ever had to claim once, tooth problem in Key West. Dealt with promptly and with no problems whatsoever. Tesco Travel Insurance.
With respect to a previous poster, I would have thought that it would be fairly obvious that a proof of purchase receipt would be required from the Insurance Co. With many people putting in false claims these days, this must surely be mandatory when making any claim.

[parabellum]

Spoke to an underwriter who said he never ceased to be amazed at the number of people who took the cheapest flights possible back and forth to European holiday resorts that, if their claims were to be believed, had Gucci luggage that contained tens of thousands of pounds worth of photographic equipment and computers!:)

Travel insurance usually does what it says on the tin, trouble is, who bothers to read the tin? In fairness to infrequent travellers who book through travel agents they are often sold insurance on a commission basis by the staff who don't fully explain everything to them and in some cases you would need to be a lawyer to understand it anyway!

[Mad (Flt) Scientist]

re OP

Problem is, if there were not exclusions, the liability on the company would be unlimited, and either the policies would be prohibitively expensive or would simply not be offered.

[PAXboy]

Insurance companies have to have the basic approach of not paying anything because too many people have become cheats - as evidence above with the great comment posted by parabellum. Also, I agree with ATNotts that 'self-insurance' is the best policy, wherever possible.

On any occasion that I have had to claim against my American Express insurance originally, the old 'Centurion' policy but the Platinum card one for the last ten years or so - they have always paid in full. When I was delayed in New York by the 2003 power blackout, they paid to the fullest extent of the policy even though it cost me more.

If I claimed £100 for an item and did not have a receipt, I would not expect to get paid. If the item was a five year old jacket that still had years of good wear in it? Tough. That's life.

You can tell I'm middle aged when I say, "If you still have your health, then the rest of it is just money." Sure, if I was out of pocket, I'd be a bit fed up but - if I got home healthy and able to carry on my life? That's a good result and more people ought to stop feeling so sorry for themselves. Yes, insurance companies have small print. It's called life.

[Capetonian]

Insurance companies tend to work on the basis of 'reasonableness', so to cite the example given of someone who booked a 99p. ticket and then claimed to have Yucci bags and £3000 worth of photo equipment .... errr.... no. The guy who travels Business Class and claims £500 for a broken camera will probably find his claim honoured.

Insurers have to protest themselves against the significant minority of people who 'pad' claims.

[Abusing_the_sky]

If we are talking about the volcano causing the flights disruption, this is what i have found:

Regulation 261/2004 - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Regulation_261/2004#Cancellation)

Having said that, i think it's only fair for airlines to say no to payouts if:

the cancellation was caused by extraordinary circumstances that could not have been avoided by any reasonable measure.

[OverRun]

The following e-mail was sent to my wife on the 19th April from an Australian insurer with whom she had a travel insurance policy (and the insurer's name has been altered to Widgetsure by me to ensure non-commerciality). I was so amazed by this e-mail that I had to share it on PPRUNE. But from what I've read elsewhere do NOT assume that your insurer will act like this.


Dear EDDA

Widgetsure manages the travel insurance policy that you recently purchased.

As one of our policyholders who may be affected by disruption to flights caused by the volcanic ash cloud over Europe, we want to reassure you about the coverage of your Widgetsure travel insurance policy.

All our comprehensive travel insurance policies, purchased before 16 April, include cover for cancellation and accommodation expenses associated with delayed flights as a result of the ash cloud.

Currently you may be having problems in contacting us by telephone as we are experiencing very significant call volumes. We hope the following information will provide you with the detail and certainty you need to rest easy about your travel insurance policy. If after reading the following you are still unsure or concerned please call us on our 24 hour emergency assistance number +61 7 3305 7499 reverse charge from anywhere overseas or 1800 010 075 free call within Australia. Or you can email us on

We will continue to monitor the situation and respond to any changes in this developing situation as they occur. If you are not due to depart Australia until after next week we ask you to be patient with the situation and not rush to cancel your plans at this stage.

The following questions and answers relate to the travel insurance cover that Widgetsure policies, purchased before 16 April 2010, are providing to Australians affected by flights disruption caused by the Iceland volcanic ash cloud.

If I am stranded in London and unable to board my flight to Australia will Widgetsure cover the cost of additional accommodation/hotel expenses while I wait for a flight home? What if this continues for weeks, is there a limit to the support you will give me?

We will cover the cost of reasonable accommodation expenses while you wait for your flight home. We want to help so by reasonable we mean the same standard of accommodation that you have been paying for as part of your trip so far.

In terms of any limit of cover, firstly, let’s hope for everyone’s sake that flights can resume safely as soon as possible. However Widgetsure will not abandon any of our policyholders that are stranded as a result of the volcanic ash cloud.

What if I have run out of money and my credit card is ‘maxed’ and I am unable to pay for additional accommodation?

Widgetsure can help by acting as guarantor with your hotel or other accommodation provider for your accommodation while you are unable to board your flight. If you have already incurred costs for additional accommodation, those costs can be refunded once you submit your claim with us.

What about food and living expenses—will you cover that as well?

Some of our policies do provide for additional expenses of up to $200 per day for reasonable living expenses—always in these cases we urge you to keep all your receipts that you need to substantiate your claim with us.

If I am hoping to fly to Europe this week for the start of a dream holiday and my flight is cancelled indefinitely or until further notice, will Widgetsure cover the cost of my cancelled flight and all the accommodation and tours I had booked?

Yes we will cover your cancellation expenses though we believe that all major airlines will either refund fares or offer rescheduled flights when they are able to. We encourage people to continue to talk to us and their airlines about what options are available to them.

There are some Australian travellers stranded in Iceland at the moment and apparently they may be able to board a flight to Seattle and fly back to Australia via the United States—will Widgetsure cover these travel costs? And what if the travellers are short of cash or credit, can Widgetsure help?

Our policies do provide cover for alternative travel costs and we are able in most circumstances to act as a guarantor for expenses. So if you are a policyholder stuck somewhere with limited or little cash at your disposal, we can help. Every case is different so we do ask our policyholders to call us in the first instance.

What else should I be aware of?

If you wish to check the detail of your policy coverage, we encourage you to read the Product Disclosure Statement that you received when you purchased your policy. This will give you more detail about what your policy provides cover for and what it does not.

When you call us to discuss your travel options and policy cover, it would be useful if you had a copy of your travel itinerary with you—that will save time in assessing the best next steps for you.

You should take all reasonable steps to minimise your expenses and this includes rearranging your journey where possible.

With your claim, you will need to submit all receipts for any additional accommodation and transport expenses. If you are claiming cancellation or additional expenses you will need to submit all documents showing what your original planned pre-paid arrangements were, along with any receipts and documents showing your new arrangements, and advice from the travel provider indicating the non-refundable portion of the journey.


Extra-ordinary but true
Overrun

[Airclues]

Abusing the sky

The phrase that you have quoted only applies to cash payments. Under EU law the airlines are still liable for accommodation and refreshment expenses.

These choices, and the entitlement to refreshments, etc., apply to all cancellations, regardless of whether the circumstances are extraordinary or not.

Dave

[m500dpp]

Not affected by recent events but I do have HSBC travel insurance attached to my bank account. The policy specifically excludes "acts of God", BUT HSBC have decided to pay out on claims on this occassion.......

Was delayed 23 hours at Dom Rep couple of years ago, phoned HSBC Insurance expecting £75 for a 12 hour delay, but was told "thats almost 24 hours so we'll pay £150" money was in the bank in 3 days......

Advance bank account costs £12 a month, seems good value!

(HSBC Employee, but no axe to grind!!!)

[Octopussy2]

FlyingOfficerKite said:

When you take out insurance, of whatever kind, the words that come to mind that describe the service you expect include 'piece of mind', 'comprehensive' and 'safety net'.

The people travelling home as a result of the current travel chaos are likely to have a far different view. Words they might use would be 'small print', 'exclusion clauses' and 'limited cover'.

I get a bit impatient with this kind of thinking. What you dismiss as "small print" is the insurance company's contract with you. It sets out what it will and will not pay for ie. what you are going to get in return for your money. Different policies have different provisions (and to a certain extent, you get what you pay for - there may be a good reason that a particular policy is cheaper than others). If you can't be @rsed to read the terms of the contract you have entered into, and merely assume that particular cover is in place, well, frankly, aren't you asking for trouble? Take some responsibility and READ the damn thing!

[FlyingOfficerKite]

I do read the 'small print'.

However, the issue is when people are stranded as they have been during the past week, have travelled on a recognised airline and have taken out travel insurance they do not expect to be stranded overseas and left to their own devices.

Maybe it is time the insurance industry was overhauled - even if that meant that travellers understood where they are with the insurance. High premiums - you get home. Low premiums you take a risk.

At the moment it seems people are angry that they do not have the facility, through airlines, travel companies or insurance companies to return back to their destination without it being at their own expense.

In so far as the question of 'reasonable' claims is concerned, I fully appreciate the comments made above regarding fraud.

However, in my case, all I claimed for was some items of clothing and perfume that had been stolen from my wife's suitcase at Puerto Plata. I did not think it reasonable to expect to have receipts for clothes and prefume that were presents and therefore for which we could not possibly have proof of purchase.

KR

FOK

[Octopussy2]

I do agree with you that people shouldn't have been left stranded, because it appears that the airlines were obliged (by EU law) to provide/accommodation food and that some have fallen short of their obligations.

I suspect (although I don't know) that the reasoning behind the EU law is precisely because most individual travel policies exclude liability for "acts of God" etc. The airlines should be aware of the EU regulations and insure accordingly (or choose to take the risk, as we can infer Ryannair has done). The airlines seem in some cases to be arguing that "they couldn't possibly be expected to bear losses in these circumstances". The fact is, they are, and they should have insured against it. It goes without saying that airlines have far greater purchasing power when it comes to insurance cover than any individual.

[Anansis]

It goes without saying that airlines have far greater purchasing power when it comes to insurance cover than any individual.

Perhaps the EU should introduce a cumpulsary insurance levy on all tickets for travel within Europe. Even something as small as 0.10p would generate considerable revenue.

£0.10 x 22,000 (estimated daily flights in europe) x 100 (estimated average number of pax per flight) x 364 (days excluding christmas) = £80Million.

These figures are just an example of course, but I'm sure you get the point.

This revenue could be used to underwrite a Europe wide insurance policy to reimburse all reasonable passenger expenses in the event of delays or cancellations. Plus, as there would be an external body governing payouts, it would be harder for airlines to use weather to justify cancelling unprofitable flights.

Most of these costs are already absorbed by the airlines so overall, there should not be any overall increase in fares.

[Airclues]

My travel insurance states;

"You are not covered for.....

3. any claims arising from withdrawal from service temporarily or otherwise of the aircraft, coach, train or sea vessel on the orders or recommendation of the Civil Aviation Authority or a Port Authority or similar body in any country".

Dave

[Nick Riviera]

There is no such thing in an insurance policy as "An act of God." It has no legal standing if such wording exists. The policy will state what it includes and what it excludes. If your particular claim does not lie in the exclusions table then the company is liable.

[m500dpp]

From HSBC's statement:

HSBC TRAVEL INSURANCE PROVIDES COVER FOR CUSTOMERS FOLLOWING VOLCANIC ASH DISRUPTION

HSBC has today confirmed that, although volcanic eruptions are not usually covered under travel insurance policies due to being outside an insurer's control (commonly known as 'Acts of God'), they will, on this particular occasion, allow claims from customers affected by the volcanic ash that has recently grounded flights.*
Although airlines will refund or rebook flights, many passengers face the cost of hotel rooms and car hire that have not been taken up. Customers should in the first instance contact their airline or tour operator to see what help and assistance is available from them.
Today's announcement will ensure that travellers with HSBC policies can have the reassurance that they can now claim for their disrupted travel. Customers with HSBC Premier and Advance current accounts are also covered.
Paul Thurston, Chief Executive of HSBC UK, said:

'The volcanic ash disruption is an unprecedented event and has left thousands of travellers disappointed. Not all insurance policies are the same and some will not help customers on occasions like this.'

Acts of God may not have legal standing but it is in common use....

[passy777]

I'm sure many will be horrified, but when travelling within mainland Europe, I don't ever take travel insurance.
The EHIC card will ensure I'm looked after in the event I become ill


A risky strategy indeed as travel insurance is not just for 'being looked after' should you become ill when overseas.

Sure, your EHIC card may 'cover' you for illnesses within mainland Europe, but what a burden to place upon your family should you or your partner etc. drop down dead while away in mainland Europe.

I raise this issue because such an event happened to a work colleague recently who was fortunately (for his family) insured. His body obviously had to be repatriated (at great expense) and his partner received great support from the insurers.

Delays, loss of luggage can occur within mainland Europe as well as further afield and for the reasonable price of even a multi trip policy, it is well worth the peace of mind IMO.

My opinion for what it is worth is that it is irresponsible to travel without appropriate cover for ANY eventuality.

[Nick Riviera]

"Acts of God may not have legal standing but it is in common use...."

I know that, but unfortunately being in common use does not make it legal. Any insurance policy that uses solely that phrase as a defence against liability has no defence against said liability.

[PAXboy]

Many people use the phrase 'common law wife' but, in the UK there is no such status.

[FlyingOfficerKite]

It seems the politicians are now taking a similar view on the 'scandal of travel insurance' because, according MSN News, shadow transport secretary Theresa Villiers said a Conservative government "would conduct a wholesale review of the rules governing compensation and travel insurance arrangements for air passengers".

Brave words in an election campaign, but the intent seems to be there.

Let's hope an improvement comes, even if it is a two-tier system - 'comprehensive' cover at a price and 'budget' low cost cover.

At least travellers would know what to expect from their insurance and be able to make a value judgment based on plain English, rather than the let downs which have occurred in the past.

KR

FOK

[parabellum]

Many people use the phrase 'common law wife' but, in the UK there is no such status.


Maybe not, but, at one time, if she lived continuously under your roof for a minimum of three months didn't she get some 'rights'? Or was that something to do with establishing cohabitation? My memory fades a bit these days!

[PAXboy]

To the best of my knowledge, there never has been a common law status but it was a commonly held belief.

[Pohutu]

I'm a long time lurker, but my inner pedant has finally prompted me to post here. As a lawyer with a depressingly large amount of experience in the insurance industry, I've had a fair bit to do with insurance contract wording.

There is no such thing in an insurance policy as "An act of God." It has no legal standing if such wording exists.

Well...yes and no. There is certainly no law which states 'if you use this phrase in your insurance policy, then it means xyz'. However, an insurance policy is simply a contract, and you can use whatever words you like in it. The courts will seek to interpret them in accordance with quite complicated rules of interpretation, but in general terms will seek to give effect to the intention of the parties (not an easy task, of course,. Usually, though, if a phrase like this is used in an insurance contract, it will be specially defined, and the court will give effect to whatever definition is used. So if the policy defines an Act of God as 'Thunder and Lightning', then that is all that would be covered by the definition.

Many people use the phrase 'common law wife' but, in the UK there is no such status

It's true, you can't accidentally acquire a wife these days. And in England, Wales and Northern Ireland, you never could. But in Scotland, marriage by 'cohabitation with habit and repute' existed until fairly recently - I believe it was only abolished in 2006. It is, I think, for this reason that so many people believe that common law marriage exists.

[PAXboy]

Pohutu welcome aboard! Great to have someone in the cabin who knows what they are talking about - otherwise I'll just carry on talking rubbish. :}

As it happens, I do know something about marriage laws as it is a (small) part of my work. The marriage laws in Scotland were changed in 2006, which is why that aspect of history was expunged. They also removed an area of discrimination (regarding secular marriage) that still persists in the rest of the country, but I won't digress any further.

[Rush2112]

My travel insurance states;

"You are not covered for.....

3. any claims arising from withdrawal from service temporarily or otherwise of the aircraft, coach, train or sea vessel on the orders or recommendation of the Civil Aviation Authority or a Port Authority or similar body in any country".

Dave

You must have one of our policies!

It's been posted earlier in the thread, but seriously, read the contract before you sign it. Understand what is covered and what is not. Everything is insurable for the right price, well, OK some things are not and you have to have an insurable interest etc etc but basically it holds. If the premium is low, generally the cover will be low.

I get really hacked off with people that buy insurance and don't know what they have bought - often it's through a broker who doesn't bother to explain the policy properly and that's another gripe, parasites the lot of them - but would you buy a car without reading the manual?

[popstar]

In most cases you don't get the chance to read the policy document until you have parted with some cash.

[kenhughes]

Anyone who thinks insurance companies are going to treat them fairly and honorably, probably shouldn't be flying on their own anyway. :rolleyes:

[davidjohnson6]

What did people do in the past when they wanted to travel outside their home country before the travel insurance industry existed ?

Wikipedia indicates that pet insurance was 'invented' in 1890 and came to the UK in 1947. As far as I know, having pets was quite common in the UK before 1947, and when the dog got ill, one would pay the vet for treatment rather than just having it put down.

In case it's not obvious, I reckon insurance marketing sometimes tries to scare people into buying policies rather too much ! Still waiting for the sales rep to explain why I need life insurance when I am single and have no kids.... :hmm:

[Nick Riviera]

"So if the policy defines an Act of God as 'Thunder and Lightning', then that is all that would be covered by the definition."

Exactly, the policy must set out in detail what is included for cover. The catchphrase "Act of God" on its own has no legal standing.

[AlpineSkier]

@ATNotts

Even with your EHIC card, you may be risking more than you think.

In France there are doctors/dentists/hospitals in the public system ( agree - needs 2 e acutes ) and ones that are not ( prives). The difference is not generally marked externally and you have to ask, but if you go to a prive you will get nothing refunded .

i believe the same situation exists in other countries too.

[Octopussy2]

It's misleading to say it has no "legal standing" - rather, it has no set legal definition (just as the phrase "force majeure" has no legal definition in English law, so a "force majeure event" is whatever is defined as such in the contract).

If a policy stated that cover for "acts of God" was excluded, a court would not just disregard the words, it would try to decide (taking a number of factors into account) what it was intended that those words would mean in the context of that particular contract.

[Nick Riviera]

"If a policy stated that cover for "acts of God" was excluded, a court would not just disregard the words, it would try to decide (taking a number of factors into account) what it was intended that those words would mean in the context of that particular contract."

If this is true then I have been misinformed. I have been told that the actual "Acts of God" that were excluded would have to be listed i.e. it would state that hurricanes, volcanoes etc. were excluded from this policy under the heading of "Acts of God". The phrase used on its own with no specific examples would be null and void. As I say, perhaps I have been misinformed.

[WHBM]

An Act of God is a volcano.

A decision by sundry aviation bureaucrats to ban aviation across a continent because they cannot bring their collective minds to understand the difference between keeping a sensible distance from it, which has been done with thousands of eruptions in past decades without a single incident, and what happened to Eric Moody (who was effectively allowed to unwittngly get visual with the volcano), and then further bureaucatic shilly-shallying once they realise the stupidity of what they have done, is by no means an Act of God.

[Octopussy2]

[in response to Nick Riviera] I think you have been. I've had a quick look and I can't find anything that suggests that is the case. It's true that, if a policy included the words "act of God" without any further elaboration, the policy-holder could argue that a particular event wasn't, in fact an act of God, but there is plenty of case law out there that the insurer could cite in support of his argument that it was.

Here's a nice definition for an 1864 case:

"Circumstances which no human foresight can provide against, and of which human prudence is not bound to recognize the possibility, and which when they do occur, therefore, are calamities that do not involve the obligation of paying for the consequences that may result from them."

Generally, the phrase seems to have been taken to refer to natural disasters.

[parabellum]

As with all contracts, there is no harm it insisting the insurer spell it out, if they use the 'Act of God' phrase in a policy.

[A2QFI]

I have a policy called EHIC + which gives an unlimited number of 31 day trips in Europe for a year and covers, to some degree, the items which the EHIC does not. The cost is £28 a year.