Travel insurance is a very useful thing to have, and traveling abroad without it is not recommended. However some policyholders are uncomfortable because insurers have begun asking for much more detailed data about their customers’ medical histories. This is especially true of older policyholders, some of whom have expressed fears they’ll be denied cover altogether, or that their costs will skyrocket. Yet failure to provide the information asked for – and especially failure to disclose a pre-existing condition – could result in being denied a policy, having an existing policy cancelled, or having a claim rejected.
Staysure, a firm specialising in travel cover for the over-50 crowd, was one of the insurers that made news late last year for asking what some people considered intrusive or unnecessary questions. Staysure sent emails to their policyholders asking them to contact the company and report any sickness they’d had, even if it were just a common cold, and to declare any condition from which they’d suffered or for which they had gone to a doctor. The insurer explained that they were simply trying to be proactive, though a spokesman with a consumer advocacy bureau warned that this could be the beginning of a trend in which all travel insurance providers might force their customers to disclose even the most trivial of ailments.
Since insurers are calling the shots for the most part, consumers have to comply if they want travel cover. Here are some pointers that can help you avoid travel insurance pitfalls.
- Make sure you know how your insurer defines “healthy” – and how closely you fit that profile. This requires a thorough knowledge of your insurer’s policies and procedures. Not surprisingly travel cover can cost you more if you’ve been ill, and some insurers even charge more if you have a family member at home in poor health. As noted above you run the risk of having a claim rejected or even having your policy cancelled if you fail to disclose everything to your insurer. That’s why it is so important to read the fine print so you will know precisely how your insurer defines “healthy” and more importantly, how closely you fit that profile. You need to know what your insurance company does and does not require you to report; some insurers take a more moderate approach than others. Currently most insurers do not require you to disclose a medical condition that occurred two or more years ago, provided the condition is completely resolved. But if you are on any type of medication you do need to let your insurer know. If you are confused about whether you need to report something it’s better to ask, and most insurance companies have a helpline to clear up any confusion.
- Watch out for traps with annual (as opposed to single-trip) policies. For the infrequent traveler a single-trip policy is generally adequate, but people who go on several trips a year usually find it more economical to purchase a single policy that covers a period of 365 days. That’s usually the smart thing to do. One cautionary note: some policyholders have run into problems when they became ill in the middle of that annual period and the insurer said the policy was no longer valid. Others have had their premium raised in the middle of an annual policy due to the new medical information they submitted when requested by their insurers. This is another reason it’s so important to make certain that you review your insurer’s procedures, and discuss these contingencies with your insurance agent so you won’t be left without cover just when you need it the most.
- Know your rights. The Consumer Insurance Act, which came into force in April 2013, has given policyholders a little more protection against insurers’ tricks. For instance the Act gives policyholders legal protection if they accidentally provide incomplete or incorrect information to their insurer. At the very least this means that your insurer cannot invalidate your policy should they fail to ask you the right questions at the time of purchase, even if it turns out later that you have a medical condition the insurer didn’t know about. The Act also expands the rights of policyholders whose claims are denied. All of this means that insurers will be all the more likely to grill their customers for specific and detailed disclosures. On the other hand, insurers are now required to explain everything they do clearly to the customer so the customer understands.
- Don’t just take “no” for an answer. Part of knowing your rights is to know that you don’t have to lamely accept your insurer’s decision should they reject your claim because of a pre-existing condition. First file a complaint with the insurer and if they fail to resolve the matter to your satisfaction take it up with the Financial Ombudsman Service (it won’t cost you anything).
Also know that if you have a medical condition that prevents you from getting regular insurance there are specialists such as AllClear who can help those with long-term illness get cover. Travel cover comes with its share of hassles, but it’s much better to have it when you need it than need it and not have it.
For more information about saving money and getting the best travel cover for you, see http://www.moneysavingexpert.com/insurance/cheap-travel-insurance
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