Ombudsman attempts to slow the tide of travel insurance complaints

Christmas travel is enticing, but travellers need to look as closely at their financial as their sun protection.
Mark Kolbe

Christmas travel is enticing, but travellers need to look as closely at their financial as their sun protection.

In an attempt to slow the tide of travel insurance complaints, the Insurance and Financial Services Ombudsman Karen Stevens is publicising the common pitfalls tripping up travellers, and highlighting the cases she has dealt with that best show the problems travellers are having.

Too often people appear to be buying travel insurance without even reading the policy documents to find out what they are covered by. Travel insurance policies are not light reading, but people who do not may end up undermining the cover they have bought.

Stevens, says over the 20 years the scheme has been dealing with insurance complaints, overseas travel has become more and more popular, but some of the same reasons travellers' claims are being declined has not, so fht efirst time, she's brought together the most pertinent cases she's dealt with as a warning to the public. "Many complaints could be avoided if consumers knew the steps to take before they leave and during their travels," she said.

THE ONLINE TRAP: "These days, travel insurance is often purchased online, through a travel agent, or as a credit card benefit. But it is very important to get a copy of your policy and read it," Stevens said. Credit card travel insurance needs re-reading in the run up to every trip as it is too easy to find that some of the forgotten small-print means the traveller has no cover at all.  "Limitations on credit card insurance, such as time limits and age restrictions, catch people out," said Stevens. "A claimant missed out on insurance cover for his vintage watch, which was stolen in Spain, because his trip was 100 days in total, and the credit card cover was for 90. Despite the watch being stolen on the 57th day of his trip, the policy stated that to be eligible for insurance, the trip must not exceed 90 days."

THE PRE-EXISTING CONDITION TRAP: "Claims declined due to 'pre-existing medical conditions' are a common complaint," said Stevens.  "You must tell your insurer about all conditions and symptoms you know about. Even if you don't think they a serious, find out if you are covered for them before you go." Most often, travellers are covered for any pre-existing conditions, unless the insurer has accepted them in writing and charged an extra premium. In one case, the traveller's infant son had to have surgery, including a tonsillectomy. The claim was declined as the child had recurrent tonsillitis before the policy was arranged. To complicate matters further, relative's pre-existing conditions are also excluded from cover," said Stevens. "For example, when a return trip to Noumea had to be cancelled, because the insured's father-in-law died, there was no cover as the claim arose "directly or indirectly" from the father-in-law's pre-existing condition of lymphoma. Sometimes "controlled conditions" like asthma were covered, said Stevens, but policyholders have to check with insurers whether they are.

THE "REASONABLE CARE" TRAP: Insurers require travellers to take "reasonable care" to avoid causing the insurer a loss, but travellers have to be "grossly careless, grossly negligent, or reckless" to fail in this duty. "Carelessness is not sufficient," said Stevens, and policyholders need to question insurers closely should they attempt to turn claims down citing reasonable care clauses. In one case when a man left his backpack in a tuk tuk in Bangkok, the insurer claimed he was "totally careless" and "casual", but couldn't decline the claim on that basis. Most policies specifically exclude cover for personal items left unattended in a public place. Don't always take an insurer's interpretation of what is a public place as definitive. In one case, a claim was also declined for luggage stolen from the reception of a backpacker's hostel in Peru. However, while the reception area was unlocked, the police report said that the entrance gate to the reception was locked, and so the complaint was upheld. In another case a man left his bag, containing money and jewellery, on a chair while he was dancing at a wedding in India. While the insurer stated the bag was left "unattended in a public place", the ombudsman found the wedding was a private function made up of friends and family, and the insurer had to pay up.
THE JEWELLERY TRAP: Wear it, or lock it in a safe, or simply leave it at home. Many policies require jewellery to be on a traveller's person, or locked up in a safde, or it isn't covered. Reading, and understanding the policy would have alerted the traveller to their duty of care.

Contact the police and your insurer as soon as you can. Travel policies will specify the required timeframe, and usually provide an emergency helpline to call. Often insurers will ask for copies of police reports, together with receipts, or proof of ownership of stolen items. When some precious rings were stolen in Argentina , the claim was declined because it was not reported to the Police within 24 hours of the owner noticing they were missing.  
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