Lisa Bachelor, The Guardian, May 20, 2013
You've booked the flights, bought the sun cream and thumbed the glossy brochure to death. But have you bought any travel insurance and, if so, how much attention have you really paid to the details of the policy?
Insurance is notorious for being riddled with exclusions – and travel policies are no exception. If the worst happens, a rejected travel insurance claim can leave holidaymakers stranded abroad with little or no access to funds.
Here we reveal 10 of the hidden nasties lurking in the small print that could turn your holiday heaven into hell on earth.
1. Watch your excess
The excess is the amount you have to pay towards any cost you make a claim for – so if you claim for £250 and your excess is £50, the insurer will pay out £200. Straightforward, right? Not according to Graeme Trudgill, a director at the British Insurance Brokers' Association. "Be careful with this," he says. "Is it an excess per claim or per section of the policy? The difference on a stolen handbag, for example, could be one excess or three – for bag, money and passport." Some policies charge just one excess per claim, which can work out much cheaper.
2. Your own health
This is one of the most frequently used reasons for drawing on a travel insurance policy – and also one of the most common reasons for having a claim turned down. Often, a rejected claim relates to the issue of a pre-existing medical condition that has not been disclosed. The area is a complicated one because, according to the Financial Ombudsman Service, an insurer can reasonably reject a claim that has nothing to do with a pre-existing condition if they can show that they would not have allowed the policy to be taken out in the first place had the condition been disclosed.
Also, a pre-existing condition is not limited to medical conditions that have already been diagnosed. It may also apply to symptoms for which the customer has seen a doctor before buying the insurance – but where the cause of the problem has not yet been diagnosed.
3. Someone else's health
Be warned that the exclusions for pre-existing medical conditions may be more onerous when the person who is ill is not the policyholder, but a family member or someone who was going to travel with the policyholder. Most people don't have full details of other people's medical history.
Trudgill says: "If you have a relative or close business colleague whose state of health could lead to a decision by you to cancel or curtail your policy, you need to tell your insurer. If you do not disclose a serious condition you know about, and subsequently cancel your claim, it is unlikely to be paid – even if they are not travelling with you."
You might not reasonably expect your own to be covered – but what about that of someone else close to you? The FOS says it recently dealt with a case where a holidaymaker cancelled his trip after his father-in-law committed suicide. The insurer refused to pay as the policy had a general exclusion for claims relating to suicide or attempted suicide.
The ombudsman ruled in favour of the holidaymaker, as his father-in-law was not a named party to the policy and his suicide had been an unforeseen event outside of the policyholder's control.
5. Make sure you start it in time
Be very careful about when you start your policy. Most people take out insurance to begin on the first day of their holiday, rather than the day they booked. This can become a problem when the policyholder has to cancel the holiday in advance. In these circumstances, the insurer may refuse to pay any cancellation costs because the policy cover hasn't actually started.
If your claim is turned down you will need to prove (usually via a recording of the phone conversation your insurer should supply) that the insurer hadn't made you aware that you would not be covered for events before the start date of your policy. Even if no conversation has taken place and you have bought your policy online, the insurer should make it clear that the cover only commences from the start of your holiday.
6. Watch your mileage
Holidaying within the UK? Don't assume you are covered by an annual travel insurance policy – you may not be travelling far enough. Most policies contain definitions of what constitutes a journey or trip for the purposes of cover. So, for example, you may only be covered if you are holidaying somewhere more than 25 miles from your home and staying for more than two nights.
7. Hazardous sports
Travel insurance policies routinely exclude a number of sporting activities and you should check these carefully, as your idea of hazardous may be different from that of an insurer. An obvious example is skiing – even if you are only a beginner on the green slopes this is usually excluded unless you ask to have it added on.
"Flying or any other airborne activity (except as a fare-paying passenger)" is also a routine exclusion, as is scuba diving below 30 metres. Slightly less dangerous sounding – and therefore not so obvious – sports such as rugby and ice hockey are also unlikely to be covered.
8. Don't be laid back about theft or loss
Failing to obtain a police report after a robbery or failing to notify your insurer within a certain time frame is another reason why a claim may be turned down. "Follow your insurer's instructions on what to do if you think you've had something stolen," says Jeremy Cryer, head of travel at Gocompare.com. "For example, your insurer may want you to report a theft within 24 hours of becoming aware of it, so leaving it until you get home before you contact your insurer's helpline may be too late."
Your insurer can also turn down your claim if they have grounds to believe you failed to take reasonable care of your belongings. "If you leave your wallet on your beach towel and go for a dip, this is not taking reasonable care and you could be left out of pocket," Trudgill says.
9. Beware the booze
Alcohol is a surprisingly common reason for disputes over claims, as most insurers have an exclusion that relates to it. Biba research last year into the wording of 20 different policies revealed the disparity between different insurers' attitudes. Some refused to cover any claims arising directly or indirectly from excessive alcohol intake, while one refused only where blood alcohol content level exceeded "0.19%, or eight units of alcohol in a single session".
The Financial Ombudsman Service recently came across a case where an insurer refused to pay the repatriation costs when the policyholder was taken seriously ill on holiday. The holidaymaker disputed that his condition was down to excessive alcohol intake and put it down to "a dodgy prawn curry". The ombudsman sided with the insurer – medical evidence showed the policyholder had a history of alcoholism and that he had been bingeing on whiskey for five days while on holiday.
However, the FOS says it has recently seen a number of inquiries about travel policies that seem to exclude any drinking of alcohol while on holiday. "Needless to say, while it's reasonable to be aware of the repercussions of drinking heavily, we'd take a dim view of insurers penalising consumers for having some drinks (and enjoying themselves) while away," says the FOS spokesperson.
10. Danger zones
The simple rule is: if the Foreign and Commonwealth Office says don't go there, then don't expect your policy to cover a trip. "If you're in any doubt, talk to your insurer or look at the fco.gov.uk website for guidance," says Cryer.
However, some policies do not provide cover for any trip to or through four nations: Cuba, Afghanistan, Liberia and Sudan. Policies excluding Cuba include those underwritten by AIG Europe, which are sold by companies such as Direct Travel Insurance and Yorkshire Bank.
This article originally appeared on guardian.co.uk