Yahoo Finance Travel insurance: The 10 mistakes stopping you from getting a payout
Don’t believe the fashionistas: this summer’s essential travel must-haves aren’t neon yellow beachwear or unnecessarily strappy sandals, they’re something comfortable to lie on in the departures lounge and a robust travel insurance policy.
The airport chaos and cancellations we saw during the Easter and half term holidays don’t look likely to have been completely sorted by the time the summer season starts, so getting the right cover is essential.
Unfortunately, buying insurance doesn’t always mean you’ll get a pay out when things go wrong. The Association of British Insurers’ most recent statistics cover 2019/20, when only 83% of claims were paid.
To be truly secure this summer, you need to be aware of 10 common mistakes that can see a claim refused, so you can avoid falling foul of them.
1. Buying insurance too late
You’re only covered from the date you bought your insurance, so if something goes awry between booking and travelling, your insurer won’t be able to help.
It’s a good idea to buy it straight after booking your break, to be on the safe side.
2. Using annual insurance without checking the specifics of your trip
If you get annual cover, either as a stand-alone policy or as part of a packaged bank account, you need to make sure that your trip is covered.
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Some policies limit the destinations covered, while others exclude certain kinds of holidays.
3. Not reading the exclusions
You need to look through all the exclusions in the small print before you buy, so you know exactly where you stand.
Different policies will cover very different things, so it’s the only way to ensure you have the cover that’s most important to you.
Take your time and think carefully about every clause. If, for example, it says you’re covered for the first leg of your outward journey, leaving the UK, you won’t be covered for any connecting flights.
It’s also worth going back to the small print before you make any decisions. If, for example, your flight is cancelled and you’re offered a new one 12 hours later, you may consider not bothering and just claiming on your insurance instead. However, a quick check of the exclusions may well reveal that you’re not covered in these circumstances.
4. Not claiming what’s available elsewhere
Most travel insurance won’t cover you for help you could have received from another source. Flight delays are a classic example, because once you’re delayed for a significant period, the airline has to look after you.
5. Overpaying for putting things right
In some cases, there’s a fixed limit. So, for example, if you missed a flight because your car broke down on the way to the airport, there may be a limit on the amount you can pay for alternative travel. If you spend it all on a new flight the following day, and then book into a hotel overnight, the accommodation costs wouldn’t be covered.
In other cases, there’s no fixed limit, but they expect your costs to be reasonable. It means you can’t risk paying over the odds for a flight or checking into a very fancy hotel, because they’ll argue that these things weren’t strictly necessary.
6. Giving up on your trip too soon
You may be covered for abandoning a holiday because of a long delay, but only once it hits a particular length of delay — usually 24 hours.
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If you give up early, you may not be covered. If you have a good reason for doing so, you may eventually win the argument, but it’s not guaranteed.
7. Overlooking the excess
There are likely to be different excesses on different kinds of claims, which can range from £50 to hundreds of pounds.
On a family policy, you may need to pay the excess for every member of the family. Make sure you check what you’ll be liable for if something goes wrong, so there are no nasty surprises.
8. Not including pre-existing conditions
When you’re completing the medical details, make sure you include everything you can think of.
Allergies, asthma, anxiety and broken bones in the previous three months are all on the list, and might not be the first things you think of when you’re buying cover for two weeks in the sun.
If you need to make a claim, the insurer will look at your medical records, and anything that’s relevant that’s undeclared could mean your claim is denied.
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9. Not keeping the paperwork
Err on the side of caution, and keep all of it. You need a record of absolutely everything — from the original holiday to any costs of putting things right, medical care and police reports. You won’t have a claim refused for sending in too much paperwork, but you could have it turned down for sending too little.
10. Not taking reasonable care
This covers everything from packing valuables into your hold luggage or leaving things unattended on the beach to activities it seems to be risky — including a night out involving an excess of alcohol.
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Sarah Coles is a personal finance analyst at Hargreaves Lansdown and co-presents Switch Your Money On podcast.
