Reasons why your insurer might refuse your claim
Just buying an insurance policy does not mean you are certain to get a payout if something goes wrong – as many people find to their cost each year.
Tens of thousands of holidaymakers who battled the odds to get back into Britain following the volcano eruption in Iceland, may find themselves out of pocket when they come to make a claim on their insurance. Some insurance companies refused to pay out, saying travellers would not have been covered under their policies.
A spokesman for the Association of British Insurers (ABI) said: “When it comes to insurance, you get what you pay for. Unfortunately, if you bought an off-the-peg insurance policy, it is not going to cover you for everything.”
You cannot buy a policy by its name and price, and there is no alternative to checking what is actually covered.
It is not just travel insurance claims that are rejected. There are some common pitfalls when it comes to insurance claims, from travel to home insurance to critical illness.
1. NOT CHECKING IN FOR A FLIGHT
Many holidaymakers who find themselves unable to go on holiday for reasons beyond their control, such as severe weather at their destination, their accommodation provider going bust ,or even a volcanic ash cloud closing British airspace, may assume that they need not check-in for the flight they are not able to take.
Most insurance policies make checking-in a requirement for claims under the Travel Delay section.
Any other associated costs that cannot be cancelled without a charge, such as independently arranged accommodation or car hire, might be covered. However, customers must obtain a letter from the airline to confirm the flight was cancelled due to the extreme weather.
2. NOT DISCLOSING A PREVIOUS MEDICAL CONDITION
People sometimes complain that insurers wriggle out of meeting critical illness claims. Ensure you disclose all previous ailments on a critical illness policy otherwise it could give an insurer an excuse to reject a claim.
Recently the Law Commission identified worrying examples of insurers relying on these outmoded laws to reject claims. In one case, a married couple bought a critical illness policy – designed to pay out a lump sum on the diagnosis of a life-threatening illness. Although asked to declare all previous medical conditions, the couple failed to mention the wife had suffered from an ear infection that left her with some hearing loss.
She was subsequently diagnosed with leukaemia and the insurer turned down the claim, despite this condition not being linked to the leukaemia. Under strict law, the insurer was within its rights, but the Ombudsman overturned the decision saying it was “unreasonable and disproportionate”.
3. INCORRECT DESCRIPTIONS OF DOOR LOCKS
“Are the locks in your home British ‘safety-standard’, a five-lever mortice lock conforming to BS3621, or a cylinder rim deadlock?” is a question commonly asked on home insurance applications.
Not surprisingly – especially since a householder would often need to take the lock out of the door to find out – it is often answered incorrectly.
If you make a mistake when identifying your locks and it is subsequently found that the lock does not match that described on your policy, your insurer may be inclined to reduce or refuse any payout.
However, some insurers will consider if the level of lock would have to be relevant to the specific theft claim, for example, if a property was burgled and access was gained by breaking down the front door. In this instance, the wooden door frame could have been broken due to the force used, regardless of the lock.
For many home owners, however, this is not a risk worth taking. Find out if you have identified your locks correctly by visiting www.met.police.uk/crimeprevention/doors.htm.
4. LEAVING ITEMS UNATTENDED
At the airport, ski slope or on a sun lounger; if you have not kept an eye on your possessions, you cannot claim for their theft. One of the most common examples of this is, if you are in a restaurant and your hire skis are stolen, insurance compsnird may contest replacement of them.
5. DRINKING WHEN ON HOLIDAY
For many people who go skiing, the après-ski is as important as what happens on the slopes.
But remember that your travel insurance policy could be invalidated if you suffer an accident after drinking alcohol – even if you are not drunk – then make a claim for any medical bills on your travel insurance. As well as alcohol-related injuries on skiing holidays, insurers will refuse to pay out for medical bills incurred on drink-fuelled stag or hen weekends or boozy beach barbecues.
The maximum you can drink and be safe in the knowledge that your claim will not be turned down is under the UK legal driving limit – 80mg of alcohol in 100ml of blood will not be covered, regardless of which country you are in.
6. FAILING TO NOTIFY YOUR INSURER ABOUT CAR MODIFICATIONS
A rising number of disputes have arisen when insurers turned down claims because drivers installed satnav units or DVD players in their cars. This is an increasingly common practice as consumers look to save cash by improving their cars rather than buying new ones.
In some cases, though, insurers have labelled the changes “modifications” then rejected theft claims on the basis that policyholders should have disclosed them when applying for cover.
Asia Yasir of esure told the Telegraph: “Car modifications are very popular, especially among younger drivers. Adding alloy wheels, spoilers, tinted windows and DVD players dramatically increases car insurance premiums because they make it more of a theft target for similarly inclined criminals.”
Some modifications, which enhance the performance of your car, can also have the potential to increase the risk of both speeding and accidents, which have a knock-on effect on your insurance premium. She warned: “Before looking to add any modifications to your car, do your research and shop around for insurance quotes before physically making any changes.” Sound advice.
7. ANNOUNCING THAT YOU ARE ON HOLIDAY ON SOCIAL NETWORKING WEBSITES
Headlines of teenagers announcing house parties over social networking websites and their family homes being damaged are all too familiar, but what about innocently posting that you are off on a week’s holiday on Facebook or Twitter?
Much like leaving a note for the milkman on your front door announcing when you will return, posting this type of information on websites could come under the “duty of care” part of your policy.
Mrs Yasir told the Telegraph: “If a customer is proven to be ‘reckless’ with the information they have posted on a social networking site, then this can affect your claim in the event of a burglary. However, the recklessness element will be in relation to the number of friends you have and the content of the information you have posted.”
For example, with Facebook, the insurer would consider whether your contacts are actually your acquaintances or whether you have thousands of friends. Mrs Yasir added: “In which case, it is more than likely that you are providing this information to virtual strangers – which is where it becomes a problem for insurers.”
8. HOME INSURANCE AND FLOODING
If your house has been flooded and furniture is damaged, you most likely will want to toss away any soggy and rotting items during the clean up. However, in your attempts to return your home to normal, you may be reducing your claim.
A loss assessor from your insurer will need to see evidence of the furniture existing and people who throw it out prior to inspection may face challenges. Keep these until after the claim has been settled, because some providers may want to inspect the damage.
The only instance where you are free to throw out is where frozen food has thawed out in a freezer. But in this case, it is crucial to at least take photographs to document the damage.
9. FAILING TO KEEP PROPERTY IN GOOD CONDITION
If you have let your property fall into disrepair do not expect an insurer to look kindly on your claim, particularly if the poor condition was the reason for the damage and claim. If you think about those domestic policies sold by the utility companies, they always demand an annual service. Just like a car warranty which demands you use a main dealer for servicing. Not unreasonable, but sometimes a surprise.
10. GOING TO THE CHANNEL ISLANDS UNINSURED
Many holidaymakers from Britain wrongly assume that they do not need to take out travel insurance for trips to the Channel Islands.
Bob Atkinson, travel insurance expert at moneysupermarket.com, commented to the Telegraph: “Anyone travelling to the Channel Islands will find travel insurance is essential as NHS medical aid provided on the UK mainland doesn’t apply when visiting the Channel Islands.”
Mr Atkinson pointed out that the islands, which include Jersey, Guernsey, Sark, Alderney and Herm, are outside the EU, which means that the European Health Insurance Card (EHIC) is not valid. He said: “Without adequate travel insurance, any emergency medical treatment needed would have to be paid for personally.”