The long delays and cancellations caused by the increased security precautions at UK airports in August prompted many travelers to examine their holiday insurance, to see whether they were entitled to compensation. Alas, the answer in almost every case was that the inconvenience and expense attributable to a terrorist threat is specifically excluded.

Insurance companies are increasingly resistant to travel claims in general

Few would consider this example unreasonable but many are finding insurance companies increasingly resistant to travel claims in general. Unresolved issues that reach the Financial Ombudsman account for nearly one in seven complaints received by his department. One of the reasons for the insurers’ harsh approach is that people who in other circumstances would not dream of breaking the law, apparently suspend their ethical considerations when making a claim on their travel insurance. According to a new survey, more than two thirds of travellers admit that they would be willing to submit a dishonest claim to an insurer, by inflating its value by at least one third. UK insurers’ own figures suggest that one in ten travel claims may be bogus, costing the industry almost £100 million a year.

It is important to read the policy detail - check maximum limits of cover and excess amount

To be sure that a legitimate claim will be met, it is important first of all to read the policy detail. Check the maximum limits of cover and whether the excess (the amount you must pay yourself) applies to each individual item within each category. If it does, a single theft involving a series of items, such as cash, camera, passport, can result in several hundred pounds worth of valuables being automatically excluded.

You will require proof of purchase of expensive items

Expect the insurers to require proof of purchase of expensive items, which might include jewellery, a watch or a video camera.  Identify such purchases on your credit card statement or, better still, keep the till receipt in a safe place. Before taking such items abroad, photograph them in their usual surroundings at home.

Report loss of luggage before you leave the airport luggage hall

If an airline loses your luggage, report the problem before you leave the baggage hall.  You need to complete what is known as a Property Irregularity Report (PIR). If the luggage does not turn up later, ask the airline for a letter confirming your loss and keep the baggage check. This is usually stapled to your departure ticket or boarding pass. 

Notify your insurers of any possible hazardous activity

Err on the side of caution in informing your insurers of every conceivable fact that may be relevant to a future claim. It may sound absurd to tell the insurance company you intend to play tennis at your villa or complete a round of golf each day before breakfast, but claims related to injuries resulting from both these largely harmless activities have been disallowed because insurers were not informed in advance. Most people would acknowledge that jet-skiing is a hazardous sport that should be notified but many insurers have the same view of sailing and horse riding.

The more valuable the item, the more care you must devote to preventing its loss

Another contentious issue is the level of care you are expected to take with your belongings. The general principle is, the more valuable the item, the more care you must devote to preventing its loss. If you leave an item of even modest value unattended in a public place while you go swimming or visit a toilet, the insurance company is almost certain to refuse to pay out. But if you were momentarily distracted and robbed by a sneak thief, your claim would be much more likely to be accepted. However tedious it may be, obtaining a report of the incident from the local police is now considered essential. 

Not all medical expenses are necessarily refunded

In medical claims, even if you do not possess or make use of a European Health Insurance Card (EHIC) when receiving treatment in France, some insurers have begun to calculate the percentage they reimburse as though you had received free or reduced cost medical care, or had been able to claim back some of your medical expenses from the UK Department of Health.

Send original documents by Special Delivery

Almost all insurers insist on claims being accompanied by the originals of supporting documents, not by photocopies. If originals are lost in the post, or there is a dispute about whether they have been received by the insurer, this is almost always fatal to the claim, even if you have kept copies of all the documentation. Eliminate this risk by sending everything by Special Delivery and checking on the Post Office website that your letter has indeed been delivered. Insurers will rarely, if ever, give you the benefit of the doubt.

From our September 2006 newsletter