Types of complaint we see
Customers complain to us about:
- the amount they’ve been paid for a travel insurance claim
- not being given accurate information about the policy excess and/or the policy limit
Handling a complaint like this
When you receive a complaint involving policy excess and limits, you should reply to your customer within the relevant time limits.
If you don’t reply within the time limits, or the customer disagrees with your response, they can bring their complaint to us. We’ll check it’s something we can deal with, and if it is, we’ll investigate.
We’ll expect you to be able to show us that you’ve investigated the complaint thoroughly and that you have reflected carefully on the circumstances.
Find out more about how to resolve a complaint.
What we look at
As with every case, in reaching a decision about what’s fair and reasonable, we consider:
- the relevant law and regulations
- any regulator’s rules and guidance that applied at the time
- what we consider was good industry practice at the time
You can find more detail below about some of the things we look at:
Customers should have a table of benefits in their policy that clearly sets out what excesses and limits apply to each section. If it isn’t clear from the documents what the excess or limit is, then we’ll usually go with an interpretation of the policy that’s most favourable to your customer. But this doesn’t mean we’d automatically say you can’t take the excess into account.
We’ll check the policy wording to see if wear-and-tear deductions should be made from the settlement before excess and limits are taken into account. If your customer has complained to us about a settlement calculation, we’d want to make sure that you’ve deducted the policy excess and applied the policy limit, including any sub-limit, correctly.
You’ll usually need to take any excess charges into account before you apply any policy limits.
Sometimes, we see cases where an insurer has applied the policy limit and then deducted the excess. This is unlikely to be fair, as it means the customer would never be able to get the full amount of cover.
We’ll usually ask for the settlement calculations to check that you’ve deducted any excesses before applying any policy limits. If you haven’t, we may ask you to recalculate the settlement.
Travel insurance usually works on an excess per person basis – but this needs to be clear in the policy.
We sometimes see complaints about policy excesses applied to claims where one suitcase contains a family’s belongings. Sometimes a child will be a named policyholder. Under other policies, a child won’t be a named policyholder – but will be entitled to benefit under the policy when they are travelling with their parents.
You may try to apply excesses to a claim for both the parent and the child. But there might be certain circumstances where we think it isn’t fair and reasonable for you to do this.
If, for example, a suitcase contains a parent’s belongings and some baby clothes – then we might not think it’s fair and reasonable for you to apply an excess for the parent and an excess for the child. But we might think it is fair for you to deduct a separate excess for a child’s iPad if this fits with the terms and conditions of the policy.
We wouldn’t recommend that you take the full claim amount and then deduct an excess for each person – you need to treat each individual separately. So, if one person’s total claim is less than their excess, it’s not right for the difference to be deducted from another person’s claim amount
What should usually happen is that the person whose claim is less than their excess gets no settlement payment – and the other people claiming aren’t impacted.
Customers sometimes complain about being asked to pay an excess upfront. For example, a customer might call you to make a medical expenses claim on holiday. You’ll cover the claim and pay the costs directly to the hospital – so you have no other way to recover the excess, other than by asking the customer to pay it upfront.
This is standard practice – and we don’t think it’s unfair. The customer will have to pay the excess at some point – unless they bought excess waiver protection. If the claim is later declined, we’d usually expect you to refund any excess that had been paid upfront.
The amount of excess on a travel insurance policy can vary. Some insurers allow customers to add an excess waiver when they buy the policy. This means no excess will be deducted when a claim is made. The waiver is an additional benefit – so the customer may have to pay a higher premium for this cover.
Customers sometimes complain they weren’t told about the excess or policy limits when they bought the policy. In these cases, we’d look at the sales process and policy documents to see if the excess and/or limits were made clear.
Most travel insurance policies are sold without advice. Because of this, you must give the customer information that’s clear, fair and not misleading – to allow them to make an informed choice about whether or not to buy the policy. You should include information about policy excesses, limits and sub-limits. We’d usually expect you to tell your customer about the excesses and limits that apply to things like:
- medical expenses
If the sales process wasn’t clear about what excess would be deducted, or about what limits applied, then we’ll think about what (if anything) the customer would have done differently.
You can find out more about mis-sold travel insurance policy complaints on our website.
Putting things right
If we think you have made a mistake or treated a consumer unfairly, we'll ask you to put things right. Our general approach is that the customer should be put back in the position they would have been in if the problem hadn't happened.
The exact details of how we'll ask you to put things right will depend on the complaint, and how the customer lost out. In some cases, we may also ask you to compensate the customer for any distress or inconvenience they've experienced as a result of the problem.
Business Support Hub
If you want to talk informally about a complaint you've received, you can speak to our Business Support Hub. They can give general information on how the Financial Ombudsman might look at a particular complaint. We also offer guidance on our rules and how we work.
Find out how to contact the Business Support Hub.
Our insurer is charging us too much for our baggage claim
Some of the guidance we take into account when we’re dealing with complaints about travel insurance policy excesses and limits include:
- Insurance Conduct of Business Sourcebook (ICOBS) and the rules on general and protection insurance products sales.
- Customer Insurance (Disclosures and Representations) Act 2012