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ombudsman news

issue 113

October 2013

case studies - travel insurance

Complaints about travel insurance raise a wide range of different issues - from stolen wallets and missing suitcases to delayed flights and air ambulances. The complaints we see reflect the sheer variety of trips that people make - and the experiences they have while they preparing to travel or while they are away.

This variety means that travel insurance is one of the most complex products that we deal with. It could also explain why the travel insurance pages in our online technical resource are some of the most popular pages on our website - because people are looking for information about so many different situations.

Having said that, we do see recurring themes in travel insurance complaints. As we said in our annual review of 2012/2013, a significant proportion of the complaints we see come from consumers who bought travel insurance online.

Often, we find that problems are caused by the details of the cover not being made clear to consumers before they took out the policy. However, in some cases we find that consumers bought their insurance without reading through the information about the policy.

As always, we approach these cases by looking at the evidence carefully, and weighing up the specifics of the situation. Where someone has bought a policy online, we usually look at screen-shots of the insurer's sales process so we can see exactly the same information that the consumer saw when they took out the policy.

We also see cases where insurers have applied the terms and conditions of a policy in an overly rigid and legalistic way - without taking into account the wider circumstances. Where we think this has happened, we tell the insurer to put things right in a way that would be fair and reasonable in the individual circumstances of the case.

"Pre-existing medical conditions" are another recurring theme. We often see complaints from consumers who hadn't realised that their insurer expected to know not only about their own health - but about the health of their close relatives too. Case studies 113/07 and 113/08 illustrate how this situation can arise - and how the individual circumstances of a case lead to different outcomes.

issue 113 index of case studies

  • 113/6 - consumer complains her insurer hadn't made clear that travel insurance policy wouldn't cover her gap year
  • 113/7 - consumers complain that insurer rejected their claim for the holiday they cancelled after the death of a close relative
  • 113/8 - consumer complains that insurer rejected claim for holiday cancelled after the death of a close relative
  • 113/9 - consumer complains that insurer rejected claim for luggage stolen from hotel store room
  • 113/10 - consumers complain that insurer rejected their claim for a flight they missed because of heavy snow
  • 113/11 - consumers complain that insurer rejected their claim for a missed flight
  • 113/12 - consumer complains that insurer rejected claim for cancelled holiday bought with supermarket points

113/6
consumer complains her insurer hadn't made clear that travel insurance policy wouldn't cover her gap year

Miss T was planning her gap year. She knew she needed some travel insurance, so she went online and took out an annual policy.

Four months into her trip, Miss T decided to book a glacier hiking trip. When she went into the booking office to sign up, the organiser asked her to check that her travel insurance covered her for this sort of activity.

Miss T emailed her insurance provider to ask whether she was covered. But the insurer emailed her back and told her that because she had an annual multi-trip policy, she wasn't actually covered for anything at all - because the policy only covered her for trips that lasted for 31 days or less.

Miss T complained to the insurer. She said she hadn't realised that she wouldn't be covered for her gap year trip - and that the website hadn't made it clear when she took the policy out.

The insurer disagreed. It said the online sales process - and Miss T's policy documents - had made it clear that a limit of 31 days applies.

Miss T was sure she didn't remember seeing anything about this limit. So she decided to ask us to look into it.

complaint upheld

We thought it was clear that Miss T had wanted to be covered for the whole of her gap-year trip. It was also clear that the policy hadn't provided the level of cover she had been looking for.

We wanted to see what information Miss T had been given while she was taking out the policy online. So we asked the insurer to give us copies of screen-shots from its website so that we could check what Miss T would have seen.

But as the insurer couldn't give us any screen-shots, we couldn't be sure that the trip limit had been clearly set out on the pages that Miss T had seen.

We also looked at the policy documents that the insurer had sent to Miss T. Although the 31-day limit was set out in the "annual multi-trip" section of the policy booklet, the booklet itself didn't specify which type of policy Miss T had bought. And the limit hadn't been mentioned in any other communication that Miss T had received from her insurer.

Miss T's policy schedule also said that the policy provided cover from the date of Miss T's departure until the date of her return.

Taking everything into account, we could understand why Miss T had thought she would be covered for the whole of her gap year. We couldn't be sure what information she had been given during the online sales process, but we decided that the information she had been sent afterwards should have set out the limits on her particular policy more clearly.

We decided that if Miss T had understood that she wouldn't be covered for the whole of her trip, she would have taken out something more suitable for her needs. So we told the insurer to refund Miss T's premium, plus interest.

113/7
consumers complain that insurer rejected their claim for the holiday they cancelled after the death of a close relative

Mr and Mrs M booked their summer holiday - and went online to take out travel insurance. They took out an annual policy. Sadly, the day before they were due to travel, Mrs M's father, Mr D, died. He had been suffering from a chest infection. The couple cancelled their holiday and put in a claim under their insurance policy.

The insurer rejected their claim. It had looked at copies of Mr D's medical records and had noted that he had suffered from a number of medical conditions including prostate cancer, kidney-related disease and heart problems. The insurer had also noted that Mr D had lived in a care home.

The insurer said that Mr and Mrs M should have declared Mr D's health conditions when they took out the policy. It said that if the couple had told them about Mr D's conditions, it would not have agreed to pay a claim that had related to Mr D's health - pointing out that the policy specifically excluded "claims arising from the pre-existing medical conditions of a close relative".

Mr and Mrs M were surprised and upset. They explained to the insurer that Mr D's chest infection had been sudden, and that he had been expected to recover. They said that although they knew Mr D had cancer, it was a non-aggressive type with a good prognosis. So they said they couldn't understand what they were supposed to have declared to the insurer - and that they'd had no reason to think that Mr D's health would deteriorate so suddenly.

When the insurer refused to reconsider, Mr and Mrs M got in touch with us.

complaint upheld

When we looked at the terms and conditions of Mr and Mrs M's policy, we noted that it excluded claims that related to "any circumstance known to a policyholder before taking out a policy which could reasonably be expected to lead to the cancellation of a trip, unless it had been declared and accepted." This information was included in both the policy summary and the policy booklet.

So we decided that the insurer needed to show not only that Mr D had pre-existing conditions - and that Mr and Mrs M had been aware of them - but also that Mr and Mrs M could reasonably have expected Mr D's conditions to give rise to a claim.

We noted from the medical records that the insurer had been sent that Mr D's conditions had been stable and controlled for a number of years - and that he had been receiving hormonal therapy for cancer.

We also noted that the GP had said that Mr D's health had only deteriorated when he had suddenly developed a chest infection - and that he had been expected to recover. The GP said that Mr D's death had been unforeseen. In these circumstances, we did not think Mr and Mrs M could reasonably have expected Mr D's medical conditions to give rise to a claim.

We looked at the questions that Mr and Mrs M had been asked during the online application process. We noted that they were only asked to declare any medical conditions of close relatives "that may lead to a claim". So we were satisfied that they hadn't done anything wrong by not having declared Mr D's conditions - and that it hadn't been reasonable of the insurer to expect them to have done so.

In these circumstances, we told the insurer to reconsider Mr and Mrs M's claim - and to pay interest on any payment.

113/8
consumer complains that insurer rejected claim for holiday cancelled after the death of a close relative

Mr H had booked a three-week holiday to Spain. A month before he was due to travel, he went online to take out travel insurance. Sadly, three days before he was due to travel, his mother, Mrs H, died from heart failure. Mr H cancelled his holiday and made a claim under his travel insurance policy.

The insurer rejected the claim. It said that it had reviewed Mrs H's medical records - and noted that she had been diagnosed with a heart condition six years previously, and had suffered cardiac failure four months before Mr H took out the policy.

The insurer pointed out that Mrs H had been in hospital for two months at the time Mr H had taken out the policy. The insurer also said that Mrs H's death certificate said that her heart failure was linked to her pre-existing conditions. The insurer told Mr H that it had based its decision on a policy term that excluded "any claims arising from the medical condition of a relative - if the policyholder was aware of the condition when they took out the policy".

Mr H was unhappy with the insurer's decision, and he complained. He said he knew his mother had been diagnosed with a heart condition some years before. But he pointed out that when she went into hospital two months before he took the policy out, it had been for a routine procedure. He said that even though his mother had been kept in hospital for two months, he hadn't thought her condition was all that serious.

Mr H also said that if the exclusion had been made clear to him, he would have declared his mother's condition and paid an additional premium.

When the insurer turned down Mr H's complaint, he asked us to look into it.

complaint not upheld

We agreed that the insurer had not highlighted the exclusion to Mr H as clearly as it should have done. But we also needed to consider whether the insurer had acted fairly when it had turned down Mr H's complaint.

Mr H told us that he had known about his mother's health conditions when he took out the policy - and that she had been in hospital for several weeks at that time.

Mr H's medical records showed that she had been taken into hospital for a routine procedure - but that there had been some complications and her health had begun to deteriorate. We took the view that Mrs H's condition had been serious enough to be on her son's mind at the point he took out the policy - and that it would be reasonable to expect him to have told the insurer about it.

We also thought it was reasonable for the insurer to expect Mr H to have known that his mother's condition might deteriorate - and lead to a claim.

Taking everything into account, we thought it was unlikely that any insurer would have been able to offer Mr H a policy to cover his circumstances. So we concluded that the insurer's decision to turn down the claim was reasonable.

113/9
consumer complains that insurer rejected claim for luggage stolen from hotel store room

Ms S was on holiday in Amsterdam. She checked in at her hotel - but because her room wasn't ready, she left her rucksack in a storage room. The hotel's receptionist explained that the room was very safe because it could only be opened by a manager using a swipe card.

Ms S went out on a canal trip - but when she got back to the hotel later on, she found that her rucksack had disappeared. She got in touch with her travel insurer straight away - and made a claim.

The insurer rejected Ms S's claim. It said there was "no cover for property left unattended in a public place". It also said there was "no cover for theft if a policyholder's possessions had been left in the custody of anyone other than an insured person or a travelling companion". And it referred to a policy term that excluded theft claims from holiday accommodation unless there was evidence of "violent, visible and forcible entry".

Ms S complained to the insurer. She pointed out that the receptionist had told her that her rucksack would be in a locked storage room. She said she'd had no reason to think she was taking a risk by leaving it there - and that she would never have left it unattended.

The insurer rejected Ms S's complaint, so she asked us to look into it.

complaint upheld

We asked Ms S for some information about the hotel she had been staying in - and we established that it was part of a small chain of hotels. So we got in touch with the hotel company's head office to ask for some information about their policies and procedures relating to checking in, security and luggage storage.

The hotel company told us that in that particular hotel, the luggage storage room was behind the reception area - and could only be opened by a manager's swipe card.

This information tied in with what Ms S had told us - and on the basis of this information, we didn't think it was reasonable for the insurer to have concluded that Ms S had left her rucksack in a public place.

Ms S hadn't been able to leave her rucksack in her room. And in our view, it was clear she had thought - based on the receptionist's advice - she was leaving her rucksack somewhere secure. We decided, in the circumstances, that Ms S had taken reasonable steps to protect her belongings - and that it was unfair for the insurer to turn down her claim on the grounds that they weren't in her custody.

Although the policy excluded thefts where there was "no evidence of violent, visible and forcible entry", we thought that using a swipe card to commit theft would be an illegal act - and so shouldn't be excluded.

In these circumstances, we decided it would be fair and reasonable for the insurer to pay Ms S's claim in line with the limits on her policy.

113/10
consumers complain that insurer rejected their claim for a flight they missed because of heavy snow

Mr and Mrs R were going on a cruise. They planned to drive from their home - near the coast in Wales - to Stansted airport, where they would stay overnight before flying to Italy to board their cruise ship. Unfortunately, there was heavy snow on the day they were due to leave home. The roads around their village were blocked and they were snowed in. Mr and Mrs R missed their flight and their cruise ship's departure.

They got in touch with the cruise operator and explained what had happened. They said they hadn't been able to leave their village by car because the roads were blocked, and that local train services had been cancelled because of adverse weather conditions. So there was no way they could have got to Italy in time to get on the ship. The cruise operator agreed to swap their tickets for a cruise later in the year.

Mr and Mrs R were relieved that they hadn't lost out on the cruise. But because their flight, airport hotel and parking weren't included in the cruise package - and they had arranged them separately themselves - they had still lost money. So they decided to claim for their flight, hotel and parking costs under their travel insurance.

The insurer turned down the claim. It wrote to Mr and Mrs R, saying that cancellation because of bad weather conditions was not covered by the "cancellation" section of their policy. It said the only section of the policy that could apply was the "delayed departure" section.

The insurer pointed out that the delayed departure section applied only when a policyholder had been delayed at the airport or port after check-in. It said Mr and Mrs R were not covered under this section because they had never reached the airport. And it pointed out that Mr and Mrs R's flight had left on time - and that they could have made alternative arrangements to get to the airport.

Mr and Mrs R thought this was unfair, and they complained to their insurer. They said they couldn't understand why it mattered whether they had got stuck at home or after check-in. They had still missed their flight. But the insurer refused to change its position - so the couple referred their complaint to us.

complaint upheld

We looked carefully at the evidence. We noted that on the day Mr and Mrs R had been due to drive to the airport, the local police had advised people not to make car journeys unless it was absolutely necessary. The nearest train station was 15 miles away from Mr and Mrs R's house. So we concluded that Mr and Mrs R wouldn't have been able to make alternative arrangements to reach the airport.

It was clear from the terms and conditions of the policy that Mr and Mrs R would have been covered if bad weather had delayed their flight from the airport by more than 12 hours. In this case, bad weather had delayed their leaving home by more than 12 hours. The result had been the same - bad weather had delayed their departure by more than 12 hours. So we didn't think the insurer's reliance on this term had been reasonable.

In these circumstances, we told the insurer to pay Mr and Mrs R's claim in line with the limits on their policy.

113/11
consumers complain that insurer rejected their claim for a missed flight

Mr and Mrs G had tickets to fly from Bangkok to Manchester early in the morning. However, they arrived at the airport after check-in had closed and missed their flight. The couple bought new tickets and travelled to Manchester the next day.

When they got back to the UK, Mr and Mrs G put in a claim under their travel insurance for the cost of the new tickets and the meal costs they had incurred when they missed the flight. They explained to the insurer that they had missed their flight because the hotel shuttle bus was stuck in traffic on the way to the airport. They said the bus driver had said there might have been an accident somewhere that was causing the delay.

The insurer turned down their claim. It said there was no evidence to show that there had been traffic delays at the time Mr and Mrs G had missed their flight.

Mr and Mrs G complained. They said that they were in such a rush to catch their flight that they hadn't had time to get a report from the bus driver - and that the language barrier would have been a problem anyway.

When the insurer wouldn't change its position, Mr and Mrs G referred their complaint to us.

complaint not upheld

We thought it was fair for the insurer to have asked for documentary evidence to back up Mr and Mrs G's account of what had happened. When we looked at the terms and conditions of the couple's policy, we noted that it clearly set out what evidence would be required to "demonstrate the nature of any delay" - a standard requirement across the insurance industry.

We understood that Mr and Mrs G had been anxious to get to the check-in desk as quickly as possible once they had made it to the airport - and that it would have been difficult for them to stop and ask the bus driver for a report while they were getting off the bus.
However, we established that Mr and Mrs G's hotel belonged to an international chain - so we were surprised that the couple hadn't followed things up with the hotel as part of their claim.

When we got in touch with the hotel, a member of staff checked their records for the day and time in question. He told us that the hotel hadn't recorded any problems with its airport shuttle service that day.

In these circumstances, we concluded that the insurer had acted reasonably in rejecting Mr and Mrs G's claim, because it hadn't seen the evidence it needed to show that the delay had been unavoidable.

113/12
consumer complains that insurer rejected claim for cancelled holiday bought with supermarket points


Mr N and his family booked a holiday to France. They used some of their supermarket reward points to help pay for their trip. Unfortunately, just before they were due to travel, Mr N fell ill - and the family had to cancel their holiday. Mr N put in a claim under his travel insurance for the cost of the holiday.

His insurer accepted the claim. But it said it would only pay a quarter of the amount that Mr N had claimed for. The insurer said this was because the supermarket had, as part of a promotional offer, multiplied the cash value of the points by four before passing them on to the travel agent. So the insurer only offered Mr N the original value of the reward points.
Mr N was unhappy with the insurer's decision - and got in touch with them to complain. He pointed out that if the insurer only paid him a quarter of the amount he had claimed for, he wouldn't be able to book the same holiday again. And he asked the insurer to pay the full amount he had lost out on.

The insurer refused. It pointed out that Mr N's policy terms said that "claims would be settled by reinstatement of the points to their original account, or if this was not possible, the insurer would pay "the lowest advertised air fare by the original airline".

Mr N was still unhappy, so he asked us to look into his complaint.

complaint upheld

When we looked at the evidence, we could see that the insurer had settled Mr N's claim in line with the terms and conditions of his policy. And we established that Mr N had never actually had the quadrupled value of the points credited to his reward card - because the supermarket would only have multiplied their value in this way once Mr N had actually asked for his points to be used to pay for the holiday.

However, we took the view that Mr N's loss had been the loss of use of the multiplied points - and his ability to put them towards another holiday. We did not think the insurer's offer had reflected the position Mr N had been in immediately before he had cancelled the holiday - and that their decision hadn't been fair and reasonable in the circumstances of this case.

So we told the insurer to pay Mr N the full value of his claim.

image: ombudsman news

ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.