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Should you buy travel insurance from someone you can talk to, such as an insurance broker? |
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A consumer group is arguing that a travel insurer applying British driving standards to deny a claim for a policyholder injured abroad acted unfairly. It claims that omitting the condition from its policy summary amounts to misinformation. But does anyone ever read their insurance policy anyway? |
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| Author: Philip Green |
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CAG’s argument is that since there was no local requirement for a license the rider should be covered and the requirement to have a UK licence is unfair. But from the travel insurer's perspective, this is wrong thinking. Having a proper UK licence proves that you have had the appropriate training, been educated in the wisdom of wearing protective gear and other safety precautions and had your capabilities tested by a reliable authority. It is a perfectly reasonable underwriting condition because most of us know very well the dangers of riding mopeds abroad. This activity can be perilous indeed for the experienced rider, never mind a novice.
A more interesting point made by CAG concerns the extent to which the requirement for a UK licence was made clear to the policyholder when the insurance policy was purchased. CAG argues here that the relevant condition is buried in the small print of the policy document and that the insurer should have highlighted the fact in the Policy Summary (also known as Key Facts document). The travel policy was purchased direct from a well known “brand” travel insurance provider - probably via a website. According to a CAG spokesman, the provision of a "Key Facts" booklet which omitted important key facts amounts to a misinformation.
The real problem here is that most of us don’t read our policy wording (no matter how much we are implored to do so) and, in fact, insurers have been criticised in the past by regulators for making their Policy Summaries too long. The information we tend to take in when buying is that which is delivered verbally and preferably in person. If we are told something, we are much more likely to take notice. Of course, there is no opportunity for that when you buy your insurance on the internet. A better alterative might be to use an insurance broker. Apart from anything else, you have a much greater chance of redress if you have been given incorrect or insufficient advice.
In 2007 over 20 million people took out some form of travel insurance in the UK of which around 4% (850,000) made claims. The Association of British Insurers says that its members paid out £200m for people who fell ill overseas. Commenting on the CAG accusations a spokesman said: "The key thing to do is avoid getting into difficulties is to read the Terms and Conditions. If you are unclear, talk to your insurance company or broker.” Of course, that advice only works if you have someone to talk to in the first place.
Footnote: Although it may sound like it, the CAG (also known as 'Consumer Forums') is not an official body. It is an independent non-profit campaigning organisation for customer rights. It was initially successful in the recovery of penalty charges imposed by UK banks. It was founded by two individuals and is funded primarily by donations from its membership of over 170,000 which, no doubt as a reflection on consumer-life in modern Britain, is rising daily by 100-400.
About Author
Philip Green has over 35 years experience in the UK insurance and financial services industry. He is a Chartered Insurance Practitioner and graduate of the Open University. Philip works part-time as a freelance journalist, writing about current financial topics and consumer affairs. he works for online marketing agencies and a variety of clients. This article has been written on behalf of an independent insurance broker and should therefore be considered as a professional piece, written with business interests in mind.
Article Source:
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