Five reasons your travel insurance won't pay out

Travel insurance hit the headlines last week when a student who was seriously injured in Thailand had a two year battle with his insurer to get them to cover his claim.

Steven Duck was stabbed by a stranger with a syringe at all-night beach party on the island of Koh Phangan in 2009.

The risk was that the syringe might have infected him with HIV, so Duck was taken to a hospital in Bangkok and given powerful drugs to combat the virus.

The side effects of the drugs made him seriously ill and he was advised to fly back to the UK.

However, his insurer, Direct Travel, refused to pay his £2,000 medical bill and cover him for cutting his holiday short. The insurer pointed to small print that said it didn’t cover injuries received ‘while under the influence of drugs not given by a doctor’ – ignoring the fact that the 22-year-old was attacked with the syringe and had not willingly taken any drugs.

Duck took his case to the Ombudsman which ordered Direct Travel to pay up. However, the case highlights how insurers are using small print to wriggle out of paying travel insurance claims.

We’ve taken a look at the top five reasons an insurer may refuse your travel insurance claim.

Drugs and alcohol

It’s a sobering thought but all travel insurance policies will contain a clause that say they won’t cover you if you’re involved in an accident when you were under the influence of drink or drugs (except those prescribed by a doctor).

What counts as “under the influence” will depend on policy to policy but most insurers expect you to stay under the drink drive limit for the country in question.

Skiers enjoying some lunchtime après-ski often fall foul of this travel insurance exclusion and can find themselves picking up the bill for injuries sustained during an afternoon’s slightly tipsy skiing.

Negligence

Insurers also expect holidaymakers to take reasonable care of themselves and their belongings when travelling. If you don’t – and they consider you negligent – then they won’t pay out.

I fell victim to this clause myself. Years ago when I was a sun-seeking twentysomething, my friend and I left our stuff on the beach in Spain while we went for a dip in the sea. When we returned from our swim all our stuff was gone and the insurance didn’t cover it as we’d left it unattended.

Receipts and reports

If you have to make a possessions or medical claim, your insurer will expect to see evidence of the expenses you incurred. In some cases, this will include receipts for items you’ve lost or had stolen such as digital cameras and iPods. If you’ve had medical treatment and had to pay for it, then the insurer will want to see evidence of what you’ve paid.

If you’ve been a victim of crime, your insurance company will also want to see a police report before paying out.

Who and where are you covered

Check who your travel insurance covers before you set off. If you have free travel insurance with a packaged bank account, you might find it just covers you, or you and your spouse, but no one else.

Meanwhile many family travel-insurance policies don't cover children if they don't live full time with the policyholder. So if you're separated and are taking children on holiday, double-check they are covered before you set off.

Also make sure you know exactly where you can and can't go. Even worldwide policies don’t cover everywhere. Some don’t cover the US and Canada where medical expenses can be extortionate.

And virtually no travel insurance company will cover travel to a country the Foreign & Commonwealth Office (FCO) advises against travelling to. At the moment this includes almost all of Afghanistan and any part of Syria as well as several other countries.

Adrenaline junkies

If you’re likely to get the urge to throw yourself off a bridge with just a rope attached to your ankles, or hurl yourself out of a plane at 12,000 feet, check your travel insurance policy first.

What insurers class as extreme or dangerous sports will vary from policy to policy. Some budget policies don’t cover any sports at all while others will cover quite a number of adrenaline-inducing activities. There might be conditions attached though, such as height limits for trekking or mountaineering, and depth limits for scuba diving. Some insurers will add extra sports to your policy for an extra cost.

What if my travel insurance claim is rejected?

If your travel insurance claim is turned down or not paid in full, there is action you can take. First, complain to your insurer in writing and ask them to review your case.

If this doesn’t work, you can complain for free to the Financial Ombudsman Service (FOS). The Ombudsman can look into your case and has the power to force your insurance company to pay you compensation if the FOS finds in your favour.

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