One of the worst experiences any traveller can have is finding that their travel insurance doesn’t cover the particular crisis/cancellation that they’re encountering. In cases like this it feels like you’ve had not just bad luck, but have also wasted money on the travel insurance in the first place.
The onus, as always with travel insurance, is on you to do your research before purchasing a policy.
Trip cancellation is one of the main reasons people buy travel insurance, hoping to protect themselves in the event that they have to cancel an expensive trip, and it’s very often a clever policy to have. There are, though, plenty of reasons for cancelling a trip that may not, depending upon your policy, be considered valid by your insurance company. We’ve gone through various travel insurance sites, and some official bodies like the UK’s financial Ombudsman to bring you some common reasons why travel insurance companies won’t pay for a trip cancellation.
Most travel insurance trip cancellation policies include clauses for Injury or illness of insured, travel companion, family member, or business partner. In some documented cases, people have presumed that a family pet is covered in their policy when referring to ‘family member’. For example, a case cited here, a couple had to cancel their trip because a number of their dogs became ill. The insurance company refused to recognise the pets as family members, and a complaint was made, by the couple, to an independent authority. The complaint was rejected, as the authority agreed that ‘family member’ should be taken to only include human beings.
It must be an uncomfortable feeling, after you’ve purchased an expensive long-haul flight to a destination, to then see news that there’s a possibility of a tropical storm or severe weather condition, you could well imagine that it’s the perfect time to buy travel insurance to mitigate against a trip cancellation. Most standard travel insurance packages, though, won’t cover cancellations due to weather events if purchased after the weather events have been announced by authorities. Remember that travel insurance is generally meant to cover sudden and unforseen emergencies.
In many cases a severe chest infection, verified by a doctor, is a good enough reason to cancel a trip. It doesn’t always go smoothly, though, when trying to get your travel insurance claim processed. In one documented case, for example, the doctor was asked if the person insured had suffered from the condition previously; he responded positively, and the claim was contested by the insurance company. The insurance company did eventually pay out, but only after the case had been escalated to an ombudsman, and the media had been involved. It’s important to read the fine print in your insurance policy, in particular relating to ‘existing conditions’.
The UK Financial Ombudsman had this to say about how the Insurance industry treats medical based claims:
“At the claims stage, the distinctions between poor service and best practice can be even more marked. Firms that follow best practice recognise the need to treat medical-based claims with sensitivity and efficiency. They put the seriously-ill traveller at the centre of their arrangements. Other firms, however, can sometimes give policyholders the impression that they are obsessed with finding any possible indication of a pre-existing condition, so they can refuse to meet the claim.”
This is a complicated area, and as with all the points listed here, you need to check your individual policy for the fine print. Most travel insurance won’t cover a cancellation due to pregnancy, unless there are specific medical complications that prevent travel – after all, many pregnant women travel without any problems. The problem is nuanced though, as demonstrated by the case of an English GP who, due to pregnancy, cancelled a trip to Ethiopia. The trip was cancelled because of the health risks to mother and child, due to endemic malaria in Ethiopia, but the insurer refused to recognise this as a valid condition for payment.
This is a common reason for cancelled trips, and a frequent motive for submitting a travel insurance claim, but alas it’s rarely considered a valid reason for cancelling a trip, even in cases where the severe traffic congestion can be proven. You may have more luck – relatively speaking – if your car has been involved directly in the cause of congestion, i.e by an accident. You may also have more chance of a succesful claim if you’re travelling by public transport that gets delayed or cancelled.
For all travel insurance it’s vital that you follow their procedures exactly, making sure to include the correct documentation and to get the supporting evidence in the required time frame. An example: if you cancel your trip because of illness, most insurance companies require you to have a medical exam before you cancel your trip, or in some cases within 72 hours of the trip cancellation; submitting an insurance claim without that medical report will, in most cases, result in your claim being refused.
The disastrous eruption of the Icelandic volcano Eyjafjallajökull, in 2010 grounded flights throughout Europe for a number of days. Very few travel insurers paid claims relating to trip cancellations, excusing themselves by saying that the Volcano eruption and ash cloud were not insurable perils. Since then most insurance companies have revisited their policies to either explicitly rule out/in Volcanic ash. It’s definitely worth checking this out if you’re going to a destination near an active volcano.
You might imagine that buying a standard travel insurance package will give you peace of mind in the event of your trip being cancelled because the airline goes bust. You’d probably be wrong though, as most standard insurance packages won’t cover airline bankruptcy, as many travellers found to their cost when the airline flyglobespan went bust in 2009. To get coverage against an airline going bust you need to check your policy for Scheduled Airline Failure Insurance or SAFI, and here again you need to check the fine print.
A common cause for travel insurance companies to deny an insurance claim is when the traveller involved hasn’t followed the policy to the letter. An example is when flights are delayed. You might imagine that after 18 hours in an airport, with flights delayed, that it’s reasonable to cancel the trip – but you should first of all check the conditions on your travel insurance policy. Many policies require at least 24hrs delays before they’ll consider a claim. Others have more lenient time frames. Before you lose your patience and cancel your trip, check the fine print of your policy.
There can be nothing worse than being far from home when you’re informed of the death of a loved one. It’s reasonable that you would cut short a trip at this stage, but that doesn’t mean, unfortunately, that your travel insurance will cover the trip cancellation. The death of a family member, or person listed specifically by the insurance policy is usually covered, but in the case of suicide most insurance policies specifically rule it out.