Travel insurance is essential for holidaymakers, but it doesn't always provide the protection you need.
If you've read my blog you'll know one of my ultimate financial pet hates is insurance policies that are littered with exclusions. Exclusions help insurers duck out of paying claims. Obviously, I don't expect a policy to cover every conceivable risk, but I do expect a risk to be included if it's fair to the policyholder.
This issue is now even more important to me after a recent holiday. The problem was that a travel insurance policy failed to come through for a friend who should have been travelling with me.
Holiday heartbreak
As a group of six, we had planned a three week trip travelling through China. We applied for the necessary tourist visas three months before departure. The Chinese authorities insisted on proof of where we would be staying during our trip, and when we would be leaving the country to return back to the UK. We had no choice but to book return flights and some accommodation before we submitted our visa applications.
But later one of the six applications was rejected.
I won't bore you with the in and outs of what unfolded next, but the upshot is that as much as we tried, the Chinese Embassy wouldn't tell us why the application had been turned down -- they are not obliged give reasons. The Embassy asked the Chinese authorities to review the application as even they couldn't see why it had been declined, but no final decision was ever made.
Now I'm certain my friend has nothing dubious lurking in her past which would cause the Chinese government to bar her entry into China. My guess is that it was probably a case of numbers. Perhaps the quota of visas had already been handed out and it was just sheer bad luck.
While it was extremely disappointing for her miss out on the holiday of a lifetime, worse was yet to come when we discovered her insurance policy wouldn't cover cancellation of the trip.
My friend is now more than £600 out of pocket having been forced to cancel her flights, as well as an internal flight in China and accommodation. And I'm not happy about it.
Industry standard
Unfortunately, her insurance company isn't alone in refusing to cover visas. In fact, it's the industry standard. Policies routinely cover holiday cancellations for risks such as ill health/injury, job loss and jury service. But visa rejections are specifically excluded even though visas are required for many frequently visited destinations such as Australia and India as well as China.
So today I tried to hunt down a policy that might be a bit more flexible. But, I've drawn a blank. I asked the Association of British Insurers (ABI) and a travel insurance broker for help, but we've not found any policy that covers visa rejections.
I've made it my mission to find out what travel insurance companies are playing at because for many people -- like my friend -- visa approval is completely beyond their control.
I asked the ABI why travel insurance companies won't cover visas. They said policies can't insure against every possible risk and provide value for money.
They also said that the individual could be held responsible for failing to get a visa if, for example, they applied too late or they have criminal convictions which could bar them from entry into a particular country. This is why insurers refuse to cover the risk of being rejected for a visa.
However, my point is that travellers should be covered where they have clearly been rejected through no fault of their own. And in my recent holiday experience, it seems visa rejections are becoming increasingly common for people like you and me, so I think there's a real need for the insurers to rethink the cover they offer. After all, just because something is the `industry standard' doesn't mean it should be.
The ABI also claimed travellers are more interested in being covered for the risks they worry about the most, such as suffering an illness or injury while on holiday or losing baggage. But I think it would be a far greater concern if more people were aware of this problem.
Optional extras
So why can't visa cover be added as an optional extra? I would certainly be willing to pay a little more for the added protection. Perhaps insurers fear too many policyholders would need to claim. But what use is a travel insurance policy if it can't, or won't, deliver the cover you need?
It never occurred to me that my tourist visa application might be rejected. I'll think twice next time I plan a holiday. And since I have no idea whether I'll be accepted again, I'll probably steer clear of any destination which needs one.
And that's all thanks to the travel insurance industry for spectacularly failing to meet the needs of its customers.
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