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Why the latest ash cloud should act as a wake up call for travellers

Chris Torney, Personal Finance Editor at the Daily Express, says the latest ash cloud should encourage travellers to get the right kind of insurance

The latest episode in the ongoing Icelandic volcano saga appears to have ended without too much disruption.

Certainly the ash cloud produced when Grimsvoetn erupted last month has had nothing like the effect Eyjafjallajökull had in April and May 2010, when much of Europe’s airspace was closed at one point or another.

From volcanoes to cabin-crew strikes or heavy snowfalls, British travellers have in recent months faced a host of obstacles when trying to get away from it all.

So it is to be hoped that these events – and the regularity with which they now seem to occur – can act as a wake-up call for previously unwary travellers who fail to take out the right protection before they head off on holiday.

Too much choice?

Having your hard-earned break delayed or cancelled is bad enough. But if you don’t have the right kind of travel insurance, you could have insult added to injury if you are denied compensation or face a long battle with airlines and tour operators for a refund.

As news of Grimsvoetn’s eruption broke, thousands of Brits scheduled to head off for the bank-holiday weekend or a half-term break will have been frantically checking their travel policies’ small-print to see if they would be able to claim in the event of their flights being grounded.

And this is the problem: with hundreds of different types of holiday insurance now available, too many of us are signing up without knowing exactly what we are covered for.

Research from analyst Defaqto has found there are now 378 single-trip travel policies on the market, compared to 308 in 2008.

That’s great news for consumer choice, but it does mean that buying the right cover can be confusing.

Work out what’s important

Frequently, people opt for protection on the basis of price. But the problem here is that many of the cheap travel insurance policies are full of exclusions which mean that you won’t be able to claim in a variety of circumstances.

For example, many deals now exclude disruption due to weather or similar events – which could mean no claims as a result of volcanic ash.

Others won’t give you your money back if your airline goes bust, or if you’re forced to cancel your trip due to illness, for example.

Trying to save money on your policy is fine, but before you buy, work out what you most want to be covered for – whether it’s lost luggage or airline failure – and make sure the insurance you choose providers the relevant protection.

As well as a financial safety net, insurance is supposed to offer peace of mind: so there’s no point buying cover and then worrying about whether it will pay out if things go wrong.

Could the travel insurance industry do better?

Steve Williams, head of travel insurance at Confused.com, offers up his thoughts on the volcanic ash chaos.

Over the last week I can definitely say I’ve seen my fair share of news and commentary about the volcanic ash spewing out from Iceland.

Now, as flights have begun to take off again, I’m reflecting on the issues this unprecedented event has thrown up, and how the situation has been handled.

Since the volcano erupted, airlines have been claiming they are losing millions of pounds every day, and, whilst I sympathise with them, they have a legal obligation to their booked passengers, and should have a contingency plan in place for instances like this.

At the same time, the travel insurance industry could also have taken a uniform approach to dealing with the travel chaos, but at present, this is not the case. It’s at times like this that people expect their travel insurance policies to provide for them, but it seems some people will be disappointed. Travel insurers are adopting differering approaches to what they will cover in relation to volcanic ash claims.

If you want to know what our travel insurance providers are saying about what is covered and what isn't, you can see all responses we received from our partners on our Editor’s Blog.

In the meantime, you might be thinking; ‘I buy travel insurance to cover me for things like this, so how can insurers say I’m not covered?

Well, part of me thinks the same thing. But, insurance providers are describing this incident as an “Act of God”. This technically means an event outside of human control and hence gives them a legal basis to decline claims as a volcano, it can be argued, fits this definition.

If you ask me, it’s a pretty poor argument which may cause people to lose faith in insurers and make them question the point of having a travel insurance policy at all.

The Aftermath Of The Volcanic Ash Chaos

So what now? Insurers will likely spend months wading through claims against the chaos and this may have a negative knock-on-effect to the detriment of consumers. What I mean by this is that, potentially, a large wave of claims will be paid by insurers. But, should this happen, my prediction is that the cost of travel insurance will rise to cover the losses they will suffer.

This is bad news for customers, but perhaps some good could still come out of it. With all the negative headlines about insurers using the “Act of God” clause to avoid paying claims, maybe they will see this as an opportunity to offer policies that cover for every eventuality.

But if this is something we, as consumers, want, we should also be prepared to pay more for it.

What is a pre-existing medical condition?

 
 
This week's question goes to Steven Williams, head of travel insurance at Confused.com...

Question:  What is a pre existing medical condition? And if it has been treated and cured is it still a pre-existing condition?

A:  This is an interesting question and one which many people may be confused about. Firstly, it’s important to know that the rules on medical conditions can differ by provider, so you must check the policy wording or speak to a representative if you can’t find the information.

Always look for “policy wording” or “policy document” if there’s one available. Most providers will also have a “policy summary” section, but this usually doesn’t cover the necessary information. In each document there should be a section on “medical conditions” where you’ll find “pre-existing medical conditions”.

A pre-existing medical condition is defined as, but NOT limited to the following:  Any respiratory condition (relating to the lungs or breathing); any heart; circulatory; kidney; liver or cerebral condition; any stroke or central nervous system disorder for which you have ever received treatment.

It also applies to any cancer for which you have received any diagnosis or treatment within a given time period, usually between one year and as much as 10 years (this differs between providers so check.)

And finally it applies to any in-patient treatment you have received, such as surgery or any investigation in a hospital, clinic or medical practitioners within a given time period. For example, it could range from the last year up to five years again, depending on the provider.

If you need to get travel insurance for a pre-existing medical condition bear in mind that the price is likely to be higher than for a standard policy. This is to be expected because the insurance provider is offering an enhanced policy for your medical condition.

If you’re searching for travel insurance that covers pre-existing medical conditions on Confused.com then the following may be useful:

Visit: www.confused.com/travel-insurance and click the ‘quote me travel insurance’ button where you will be taken to the assumptions page.  Click the button which says: ‘I don’t meet the assumptions but still want a quote’ and a panel of specialist providers will be displayed ready to quote you.

Remember, when filling out the required question set online, provide as much detail as possible to ensure you get the right level of cover.

If you have a question you'd like to put to the Confused.com team or Confused.com community, post your question in the comment section on the blog. Alternatively, e-mail editor@confused.com and we will do our best to provide an answer.

How do I know if I have enough cover for my holiday?

Fielding this week's question is Steven Williams, head of travel insurance at Confused.com...

QUESTION: How much travel insurance do I need to take out for my holiday or trip?

ANSWER: Deciding how much travel insurance you need for your holiday really depends on your circumstances however there are some guidelines you should follow. We’ll focus on the key elements of cover that most people think of when purchasing travel insurance.

These are:

Medical expenses

Baggage cover

Single item limits

Cancellation cover

Passport cover

It is recommended that you have minimum levels of cover before you travel. This will vary slightly depending on where the information is coming from, but as a general rule you should have £5 million worth of medical cover, £2,000 of baggage cover, £3,000 cancellation cover and around £100 of passport cover.

These are just guidelines and anyone travelling should look at their own circumstances to estimate how much cover they think they will need.  For instance, if you’re going on a short trip and the amount of baggage you take with you is small, the cost of replacing your baggage if it was lost may differ to say if it was lost on a long-haul trip, where you may be travelling for a longer period.

You need to be aware that insurance companies usually have a “single item limit” between £200 and £500 which means you can’t claim for more than this on any one item you have with you. Therefore, you may want to consider leaving those £1,000 pair of laptops at home, but if you have to take them, don’t fret.  Check your home insurance policy and see if these items are covered under that if you have one or see if you can add items to your home insurance policy under the section of “items away from the home”.

Cancellation cover works in the same way. If your holiday only costs £2,000, look for a policy that covers you for £2,000 (less any excess). Looking for a policy for £3,000 doesn’t mean if you have to cancel you’d get the £3,000 (we can all wish though).

And finally, passport cover is also important, as losing your passport isn’t a nice experience and can cause immigration issues even if you’re a UK citizen returning home to the UK. Getting emergency passports are costly, so this is a handy benefit to look out for in a travel insurance policy.

All in all, it’s worth bearing in mind that the more cover you have, the higher the travel insurance premium will be. Don’t over insure yourself, because you can’t claim for more than the baggage or trip is worth and keep costs down by finding sensible insurance cover that meets all your needs.

If you have a question you'd like to put to the Confused.com team or Confused.com community, post your question on the blog and let the community provide an answer. Get posting!