Don’t turn your sun trap into an insurance trap!
Are you in the position of having to make a claim on your travel insurance due to COVID-19? You’ve probably never had to really think about your travel insurance before, you generally pay a small premium just in case something goes wrong, but you would never normally expect to make a claim.
You might be surprised to know that a travel insurance policy is one of the most complicated policies in existence. The term small print might as well have been coined just for travel insurance because, yes, the print is usually small because there are so many terms and conditions that need to be included.
Trap 1 You don’t think you need travel insurance
You’re booking a fortnight in Portugal and have just heard that the reciprocal medial agreement for countries in the EC stays in force for now, even though the UK has left the EC. So, is there any point in paying for travel insurance? You might feel the flight and accommodation isn’t going to cost too much, and so you are disinclined to bother with insurance.
Even if you are happy to take a risk that you might lose your flight and accommodation costs if you can’t travel because of, say, COVID-19 – you need to think about what might happen if the holiday has to be curtailed once you are abroad. Even if you don’t have to pay for hospital care, your illness or injury might be such that you and those in your party have to return home early. Return flights purchased at the last minute to get you home won’t be at the same bargain-basement prices that you paid at the outset. In some serious cases, medics advise an immediate return home by air ambulance – how are you going to find the £30,000 or so to book a plane if you have no insurance?
So, you must make sure you take out cover.
Trap 2 Think very carefully about your existing health conditions
When you apply for insurance you must think about existing health conditions that you might have, and anyone else who is travelling with you. If you suffer, say, a heart attack while you are away but you failed to disclose you had had a minor heart complaint four years ago, your insurers are not going to pay for your emergency treatment or repatriation costs.
Before you apply for insurance have a careful think about your medical history and write it all down first. That way, you can be confident you haven’t overlooked anything. But you haven’t finished there. A good travel policy will also protect you in the event of an accident or illness suffered by anyone else on whom your trip depends. This might apply to a business partner or a relative.
Think. If something happened to a person that would require you to either cancel your trip, or come home early, you will normally be expected to declare their medical history too. That might sound harsh or unreasonable but, right or wrong, that is what many insurers will expect.
Trap 3 Buying Travel Insurance for a Group
You might decide to give your family and friends a treat and so you fund a group holiday. Everyone loves a free holiday and so you end up with a group of eight. You already have an annual insurance that covers you and your partner which you are confident will cover COVID-19 cancellations, so you tell the rest of the group to take out their own travel insurance. That isn’t likely to work.
The only entirely satisfactory way of insuring for a group is to ignore any existing policy and to take out a new, one-off policy for the whole group, listing each traveller. Otherwise, your existing insurer will only pay for the losses suffered by the two existing policyholders. And much of the cover bought by other members of your group will only cover them for their own financial losses. If they haven’t had to pay for the holiday, they will have no financial loss. So, the rule is, one group, one policy. Yes, that is unreasonable and unhelpful, but that’s the way it is.
When you buy a new policy, it won’t automatically include COVID-19 cover. If you want to be insured for COVID-19 cancellations, you will need to make a point of asking about it.
Some insurance packages that are attached to a bank account, such as with Nationwide, are reducing or even removing cancellation cover for trips affected by COVID-19.
You might need to shop around for cover that provides full cover for COVID issues.
Trap 4 Baggage and belongings cover
The cover provided by the less-expensive travel policies is often very restrictive, and the cover limits can be low. Sometimes the cover is not up to the job. However, if you have a home contents policy that covers your personal possessions away from home, you might already have a perfectly satisfactory cover without realising it. Check your contents policy and take advice if necessary. If you find you already have the cover you need, see if you can negotiate a discount from your travel insurance premium in exchange for deleting baggage and belongings cover.
Trap 5 Don’t delay
Don’t delay buying your travel insurance until just before you jet away. You should take out a policy as soon as you have booked, otherwise you have no protection for COVID-19 or any other cancellation.
There are many traps, as you can see. Sometimes the insurance company rejects a claim, but they may not be right to do so. If in doubt, please contact Flaxmans we are here to help.