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Travel insurance small print – what you need to know Loopholes in policies that could cost you a packet

According to the Foreign & Commonwealth Office, last year, Brits made 65 million trips abroad*.  The Association of British Insurers (ABI) stated that ABI members (i.e. insurance companies) pay out an average daily figure of £1 million to help cover the costs of medical treatment abroad, cancelled trips, or other travel troubles**.

Peter Collins Director Bespoke Risk Solutions

Peter Collins
Bespoke Risk Solutions

Despite the potentially astronomical cost of treatment abroad, more than one in five people still risk travelling uninsured.

But alarmingly, even those savvy travellers that do take out a travel insurance policy can also be at risk of claims not being paid.  According to Peter Collins (pictured), Managing Director of Bespoke Risk Solutions “A key problem with travel insurance is that people do not read the policies thoroughly to check the small print.  Sometimes, the first time the policy is read is at the point of claim, which might be too late.”  The Foreign Office recently reported that only 12% of travellers read the entire policy document prior to travel.

All travel insurance polices contain clauses or conditions, which have implications especially for those with pre-existing illnesses.  It is therefore paramount that insurers are advised of medical conditions and changes to the health of the insured.  The insurer should then confirm that cover is in force.  Without confirmation, in the event of a claim, the insurer could repudiate the claim.

If a traveller needs medical assistance when overseas, the insurer’s representative will make contact with the traveller’s doctor to confirm the cause of the claim is not a pre-existing condition.  With this in mind, travellers are strongly advised to tell insurers about any past injuries, medical issues or surgical procedures  — even if there is no ongoing treatment.  Travellers must also mention forthcoming tests and investigations or medical conditions, where treatment might be needed but is not currently being treated.  For example, if you had a hip operation five years ago, yes! you need to declare it.  If you’ve been suffering with migraines but have not yet been prescribed medication or treatment then you should tell your insurers.

Some travellers innocently forget to disclose medical conditions, but absentmindedness is not an excuse.

According to the FCO, an annual travel insurance policy costs an average of just £33, while an average medical expenses claim is more than £1,200, and average cancellation claim £800.  In total last year, insurers paid out £128 million to 160,000 individuals and families to cover the cost of cancelling  holidays.***

If you are planning to enjoy a few alcoholic drinks on your trip, beware!  Most travel insurance policies exclude cover for events that happen after excessive alcohol consumption.  Remember that a quick blood test will determine your blood-alcohol levels if you are taken to hospital after an accident.

Last year, the terrorist murders on the beach in Tunisia shocked the world.  In terms of terrorism, most travel insurance policies offer only limited cover for terrorist acts; if in doubt, make sure your policy covers you for emergency medical expenses and repatriation in the event of a terrorist attack.

Bespoke Risk Solutions offers specialist insurance (including cruise insurance), which covers the insured for medical treatment in the event that they are injured in a terrorist attack.  Insurers will not usually cover cancellation or curtailment in the event of an act of terrorism, however, some specialist insurance policies will cover cancellation or curtailment to a maximum of £2000 along with medical and disinclination to travel cover – Bespoke Risk Solutions can provide further details.

Cruises have become one of the most popular holidays, particularly for the 50+ age group.  In general, some policies won’t even provide the most basic cover for cruises.  Peter Collins explained, “Cruise cover goes beyond normal travel insurance.  It must protect passengers from incidents such as trip interruption, missed port departures, global health assistance services and it’s vital that holidaymakers realise this before stepping on board. Without adequate cover, the traveller could be hit with unexpected bills on the return home.”

Graeme Trudgill, Executive Director of the British Insurance Brokers’ Association, is reported to have said “Cruise insurance is, in essence, travel insurance with a number of additions to cater for the special considerations of a cruise holiday and this means including additional cover”.  The following points are important when choosing cruise insurance:

  • Significant increases in cancellation limits. Some travel insurance schemes for cruises provide cancellation cover up to £100,000 (much more than the typical £5,000 limit on a standard travel policy).
  • A typical travel insurance policy will not normally provide cancellation periods of more than one year, whereas some specialist cruise policies allow cover for bookings for departures more than a year ahead. For example, if a booking is made in mid-2017 where the return travel date might be as far ahead as 2019. This is important when cruise liners bring forward the point at which the client has to pay the final balance for their cruise – many now require payment 180 days in advance of departure. Cruises are often booked two years in advance of departure and with the travel period added on, can easily mean a client requires cover for up to two and half years in total.
  • Medical evacuation – many standard travel insurance policies exclude cruises because in the event of a minor medical emergency an on-board doctor may be able to provide treatment but, in the event of a more serious condition, a medical air evacuation from the cruise liner may be required which standard travel insurance policies may not price for or be able to provide.

Many cruises are arranged with cruise liner departures from foreign ports and cover may not operate in the event of a flight delay causing missed departure from a foreign port. Cruise insurance will normally be able to accommodate such cover but typically, the insurer would want a minimum of a six-hour difference between the scheduled arrival at the foreign airport and embarkation at the foreign port.

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