We check on travel insurance policy exclusions
America’s “superstorm Sandy” has once again thrown the spotlight on travel insurance, and the exclusions that frustrate so many people when they come to claim. Many insurers failed to pay after a volcanic ash cloud grounded hundreds of planes in 2010, and they have frequently left travellers stranded when airlines have gone bust.
The Association of British Insurers (ABI) says that last year its members paid out £416m to policyholders. Mostly, it was for medical claims, which totalled £258m, with those for lost and stolen possessions just £23m.
But Money’s Bachelor & Brignall consumer column regularly receives complaints from readers whose claims have been rejected. So we posed a number of the most common dilemmas and asked the ABI for answers.
The area I’m going to has declared a “state of emergency”. Will my policy pay for cancellation of my trip?
Probably not if it’s something like a hurricane or “post-tropical cyclone”. Cancellation due to adverse weather is “unlikely” to be covered, says Malcolm Tarling at the ABI; people should check their policy wording as this will vary between insurers.
In general, travel insurance covers cancellation due to specific events – generally illness, being made redundant, jury service, a car being stolen or home broken into – which mean you have to stay in the UK.
While on holiday there was an earthquake. I’m safe, but the flights are cancelled and we’re going to have to stay in emergency accommodation for a while. Will the policy cover the hotel, new flights home and expenses?
This will vary, says the ABI. For example, Churchill Insurance says on its website that, provided you’ve started your trip, you will be covered for travel and accommodation costs involved in moving to new accommodation, if the place you have already booked and paid for is in the earthquake zone. It adds that if the earthquake makes it impossible to continue, the company will cover the cost of getting you home. I’ve had to receive medical treatment as a result of a falling branch during a storm while on holiday. Will the policy pay out for the treatment?
Yes. “It will pay the cost of emergency medical treatment, and, if necessary, medical repatriation,” says Tarling.
I hired a scooter while on holiday, but came off as it was going downhill and I needed hospital treatment. Will the policy pay out for treatment?
Contentious. Plenty of insurance policies exclude scooters. “Be aware that some policies may exclude motorbikes over a specified cc,” says the ABI.
On my way to the airport in the UK, there was a pile-up on the motorway, causing a huge traffic jam, and I got to the airport too late to catch the flight. Can I claim for the cost of the flights and holiday on my insurance?
We receive lots of complaints about this. Policies rarely pay out in these circumstances – at best, it will only be if your car was involved in the accident. Contracts say it’s your duty to leave enough time to get to the airport. You have more chance of receiving a payout if you travel by bus or train and the service is cancelled.
The flight has been cancelled because the airspace has been closed due to a volcanic eruption. (a) I’m in the UK. Can I claim for the cost of the flights and holiday on my insurance? (b) I’m abroad – will the policy cover the cost of extended accommodation while we wait for the ash to clear?
The ABI says that on (a), a claim will usually be made against the airline, not under your insurance: “Some policies will have a volcanic ash exclusion.” And (b) Unlikely. The airline/tour operator may provide accommodation, but your insurer won’t. Some policies pay a set amount per day to cover delays, which could help towards the cost.
I’m going on holiday to Egypt tomorrow, but a terrorist bomb has just gone off in the area I’m visiting and I’m too nervous to go. Can I make a claim for cancellation?
Tricky. Some policies may cover you if the UK government issues specific advice against travelling to a particular area. In other circumstances it might be classed as “disinclination to travel”, which is not covered, says the ABI.
My son is going on a gap-year trip and I’m arranging his travel insurance. Will the policy pay out if there is, say, civil unrest and he has to change his plans? Will it pay for him to come home if there is, say, a tsunami?
Civil unrest is not covered. Check the wording. The same may apply to tsunamis, though some companies will sell add-on policies for this type of thing.
The airline I’m flying with has gone bankrupt. Will my policy pay out for the cost of the flights?
Travel insurance is not designed or priced to cover this risk, says the ABI. However, some policies have started including “SAFI” (scheduled airline failure insurance). Always check, and if not, consider buying it as an add-on.
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