Watch out for travel insurance small print

With many travellers having suffered from issues relating to the Icelandic Volcano and British Airways strikes, specialist travel insurance provider, P J Hayman (the company behind 24/7 travel insurance) warns people to look out for other types of small print in travel insurance policies as it could cost them dearly.

Peter Hayman, director at P J Hayman elaborates: “While cheap travel insurance often seems like an attractive deal and a good way to keep costs down on your holiday, many budget providers use loopholes or incomplete cover to offer cheap deals. We suggest that people don’t simply buy the cheapest travel insurance policy unless they fully understand what they are buying. In this market, if the price looks too good to be true, it probably is!”

1. No cover for pre-existing medical conditions
Some cheaper policies provide no cover if the individual (or anyone who has an effect on their travel plans) has a pre-existing medical condition which results in a claim, for example, cancellation or medical expenses due to a recurrence of a heart condition.

2. Policies with very specific exclusions
Some insurers, in an attempt to get premiums to the absolute lowest level, use a strategy of harsh exclusions which inevitably trap people at the claims stage. Examples include very strict interpretation of unattended personal effects, valuables and money as well as a requirement to get a written police report, even though these are often difficult to get in many countries.

3. Selling policies with low levels of coverBudget covers often have very low limits for elements such as baggage, money and delay – indeed some do not even cover these sections.

4. Selling policies with very high excesses
The higher the policy excess the lower the premium can be. This is not always obvious with travel insurance until a medical claim is made and the customer finds most, if not all, of their claim falls within the excess. There are now policies on the market with medical excesses as high as £400.

5. Confusing exclusions
For example, an exclusion which applies to a “set of circumstances that could be reasonably expected to give rise to a claim”. In this instance, ‘reasonable’ is vaguely defined and open to interpretation from the insurance company who ultimately process the claim.

6. Deductions for wear and tear on baggage claims
Household insurance typically provides ‘new for old’ cover. Many travel insurance policies do not, which means the claim will be reduced depending on the age of the lost, stolen or damaged item.

7. Excesses per person per section rather than per event
This means that an event such as a mugging could result in a large number of different excesses being deducted. For example: medical costs of £450 with a £75 medical excess, damage to clothing and loss of personal effects amounting to £250 with a £50 excess, loss of money equivalent to £120 with a £50 excess, resulting in total excesses for the claim of £175 rather than £75 on an ‘event’ basis.

8. Missed connections
If an individual is delayed getting to the airport and as a consequence misses their connection, many policies will not cover the additional costs that result, such as additional ticket costs or even an unplanned overnight stay.

9. Breaking down on the way to the airportIt is often assumed that travel insurance provides cover for additional costs if the policy holder misses their flight due to their car breaking down on the way to the airport. However, some cheaper policies will only cover the breakdown of ‘public transport’, and not private vehicles.

10. Close relatives
The definition of ‘close’ is fairly ill-defined, so while you may think that all of your relatives are ‘close,’ if you study the definitions you may find that many policies limit these. So your favourite uncle becoming ill just before you go on holiday may result in a declined claim for cancellation.