The great travel insurance farce

Be careful to cancel a holiday travel if one of your relatives is ill, as you may be charged dramatically.

Insurers make it almost impossible to prove anything to them, so don’t hurry to cancel your trip if a loved one of yours is ill or have passed away.

Travelling companies have found out that insurers have a special clause in their terms and conditions that makes them free from paying anything if the illness or condition was pre-existing or terminal.

The clause is very unclear though, as there are no specifications on how close the relative should be and how to prove the condition wasn’t pre-existing. Moreover, people have to go to the relatives’ doctors and take references from there to prove the illness wasn’t foreseen. The funny part is that nobody would ever plan a vacation if a loved one was ill or dying.

Nicola Baker is one Times Money reader fed up with the system. She says she has given up buying travel insurance to cover her holidays in Europe after being unable to find one that might pay out should something happen to her elderly mother.

“Surely one of the most likely reasons you would have to cancel or curtail a holiday is the death of a loved one,” she says. “Yet the logic seems to be that if my 90-year-old mother, who does not have cancer, but does have many illnesses related to old age, dies in her sleep and I need to return home, I would lose the full cost of my holiday. If she decides to go motorbiking and crashes, I would get compensation.

“Given that most people over 50 will have close relations who may become seriously ill or die, these terms effectively excuse the travel companies from any payout to vast numbers of people.”

Many policies, such as Asda Money’s, which is administered by Insure & Go and underwritten by MAPFRE Asistencia, require you to get the go-ahead from a relative’s GP to cover you in case of unforeseen circumstances.

If your travel insurance is automatically renewed, you might not be covered if you don’t declare new ailments

An Asda spokeswoman says that customers can claim if a relative dies or is taken ill, but only “if the close relative’s doctor is prepared to state that at the date the customer bought the policy, they would have seen no substantial likelihood of the patient’s condition deteriorating to such a degree that the customer would need to cancel their trip. If the doctor will not confirm this, the claim is not covered.”

She adds: “If the close relative has a number of stable medical conditions, such as diabetes and high blood pressure . . . customers would need to check when they buy the policy to see if the GP agrees that there is no substantial likelihood of the patient’s condition deteriorating. In the event of a claim, the doctor must complete the medical certificate on the claim form.”

The Post Office says its policies offer cover for trip cancellation and curtailment because of the death or illness of a relative, but “as with any policy and as industry standard, exclusions apply of which we make our customers aware”.

A spokesman for Tesco Bank, whose insurance is underwritten by Ageas, says it would in “most instances” provide cover in the event of the illness of a “close family member”. However, he adds: “We may require information from a GP to establish whether at the time the trip was booked or the insurance was issued, that the close relative was suffering from an acute condition related to the claim.”

The financial ombudsman service (FOS), which has many complaints about pre-existing conditions relating to travel insurance, believes that this can be a sticking point for travellers. “Exclusions for an existing medical condition are not limited to those that have already been diagnosed. They may also apply to symptoms for which the customer has seen a doctor before buying the insurance, but where the cause has not yet been diagnosed.

“The exclusions may be more onerous when the person who is ill is not the policyholder, but a relative or someone who was going to travel with the policyholder. Most of us don’t have details of other people’s medical history.”

Some insurers will try to exclude from cover not only the pre-existing medical conditions of your relatives, but also any medical problems that arise between the start of a policy and the start of your holiday. And be warned: if your travel insurance is automatically renewed, you might not be covered if you don’t declare any new ailments that your relatives have developed.

In one complaint that was upheld by the FOS, a policyholder took out travel insurance at the same time as he booked a summer holiday, nine months in advance. A month later his mother was diagnosed with cancer. It was only a few weeks before he was due to travel, however, that she was told her illness was terminal, at which point he put in a claim. His insurer rejected it because, he was told, he should have reported his mother’s illness when it was diagnosed.

Although it is often not spelt out, a “close relative” is generally defined as a child, parent, sibling or grandparent. Close friends and godparents do not usually count, even if you are their next of kin. Similarly, you won’t be able to claim if you have to cancel or cut short a holiday because a pet is ill or dies.

A few insurers may cover you in the event that a close colleague’s illness means you cannot take time off work.

Graeme Trudgill, the executive director of the British Insurance Brokers’ Association (BIBA), says there are policies to cover risks involving non-travelling close relatives who are elderly or suffering from a medical condition, but you need to look beyond the cheapest or big-name providers.

The Holiday Travel+ policy from DTW 1991, offers cover for non-travelling close relatives as long as policyholders declare upfront any medical conditions that their travelling companion may have. He explains: “If the non-travelling relative is in a serious condition in hospital or terminal, they will not necessarily cover this because there is a very high chance that the client will need to claim, and insurance is designed and priced for the ’unexpected claim’. Yet BIBA brokers have covered clients in relation to their elderly or sick relatives for cancellation many times.”
To find BIBA’s find-a-broker service, call 0370 9501790 or go tobiba.org.uk

The grey areas

● Being under the influence of alcohol when in an accident or injured. It is particularly relevant on ski trips. How much alcohol is too much may be open to interpretation. Some operate a zero-tolerance approach.

● Hazardous sports and adventure holidays can make insurers nervous. Sports such as bungee jumping, scuba diving, trekking or even horse-riding, particularly if you’re not wearing a riding hat.

● Most insurers exclude any claims arising from pregnancy, whether or not you knew you were expecting when travelling.

● No insurer will pay out on lost or stolen valuables if they were checked in on a plane, even if the airline insists you put your hand-luggage in the hold.

● Breaking up with a long-term partner, even if you cohabit, is rarely considered a reason to cancel or cut short a holiday, though some insurers may take a view on divorces.