Last week, the Department of Health launched the National Pandemic Flu Service for patients who may have swine flu.  The Service was launched to reduce the burden on GPs’ surgeries by the thousands of people worried they have swine flu and to limit the spread of the virus.  Those people concerned that they have swine flu can visit the National Pandemic Flu Service website which will – after several questions have been answered – assess the patient’s symptoms and, if required, provide an authorisation number, which can be used to collect antivirals from a local Antiviral Collection Point.

As the National Pandemic Flu Service goes live, the travel insurance industry has confirmed that, in the absence of written documentation from a GP or other medical practitioner, it will accept as medical certification of swine flu diagnosis the unique authorisation number generated by the Service website, together with the label on prescribed antiviral drugs which will include an individual’s name and date of issue, for purposes of validating a related travel insurance cancellation claim.

This agreement about how travel insurance claims involving swine flu should be dealt with was made between the Association of British Insurers (ABI), which represents 90% of the UK insurance market, and the Department of Health.

The ABI said that those holidaymakers with travel insurance provided by one of its members will be covered for any costs resulting from swine flu diagnosis.  This means that if the policyholder has to cancel their holiday or flights, or if they receive medical treatment abroad, they should be covered for any costs under the terms of their travel insurance policy.  However, this is subject to specific terms and conditions.  If policyholders have any questions about this they should speak with their travel insurance company direct before travelling.

The ABI’s Director of General Insurance and Health, Nick Starling, said it was important that its members applied a consistent approach when dealing with any travel insurance claims involving swine flu.  He said:

“Travel insurance is there to help people who are too ill to travel or who become ill on holiday.  We understand that the National Pandemic Flu Service will only authorise an anti-flu prescription to people who are genuinely displaying symptoms of swine flu. On that basis, travel insurers will accept an individual’s unique ID number generated by the National Flu Service, together with the label on their anti-flu drugs which states their name and date of issue, as proof of diagnosis to validate a travel insurance cancellation claim.”

In light of this, consumers who use the National Pandemic Flu Service to obtain antiviral drugs and who may need to make a claim under their travel insurance policy should keep all the documentation they receive, including the label from their medication, as their travel insurance provider will need this information to validate any such claim.

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The Association of British Insurers (ABI) has said that those holidaymakers who have travel insurance and are by affected by swine flu should be covered for any losses they may incur, such as cutting short or cancelling their holiday, or receiving medical treatment abroad.

It has been widely reported in the press over the past week or so that the number of new swine flu cases in the UK could reach more than 100,000 each day by the end of the summer 2009.  However, most of those cases are expected to be mild.

The ABI says that so long as swine flu was not contracted before the travel insurance policy was taken out, it expects insurers to handle cases as per normal and pay out on claims for cancellation of holidays and to cover the cost of any medical treatment received abroad.

However, it warned holidaymakers advised not to travel by their GP, but still choose to do so could find their travel insurance invalidated.  This is because insurers dealing with claims involving swine flu are very likely to review their customer’s GP notes and will obviously take note of any comments that the patient was advised by their GP not to go on holiday due to flu-like symptoms.

In addition to specific GP advice not to travel, the Government or the World Health Organization (WHO) could advise holidaymakers not to travel to certain countries.  Again, any holidaymakers that ignore such advice and still choose to travel could find their travel insurance invalidated should they try to make a claim related to swine flu.

Holidaymakers should therefore take note of this useful advice from the ABI.

The ABI commented that if any travellers need to travel to an affected country – such as for a wedding or a funeral – they should talk to their insurer about whether they will still be covered.  Insurers will consider the matter on a case-by-case basis.

If holidaymakers have booked a holiday through a tour operator who decides to cancel the trip, the operator should offer suitable alternative arrangements to its customers or a refund if that is not possible.

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With the summer season coming up, UK holidaymakers have been advised to carefully check the terms and conditions of their travel insurance policies to avoid being left out of pocket in case they are hit by strikes by airline staff. 

The strikes could lead to many holidaymakers being stranded at airports or having to pay extra for hotels.  The situation could be compounded by the fact that they then might not be able to claim for it under their travel insurance.

The UK’s biggest airline, British Airways, is facing a major strike by staff after it was reported it could shed up to 4,000 jobs.  Because the mere possibility of a strike by staff has already been reported in the national press, some insurers have indicated that they will not pay out for cancelled holidays affected by the strike(s) since they were a “known event”.  For instance, one of the UK’s biggest online insurers, Swiftcover, has stated that it would not cover anyone taking out insurance for a holiday with British Airways from now on since the threat of a strike by staff has already been reported.

While most travel insurance policies cover unexpected cancellations and flight delays, some do not cover industrial action, such as a strike by staff.  Those policies that do cover industrial action first have to meet certain criteria, such as the date the policy was taken out or the type of strike, for a payout to be sanctioned by the insurer.

The cover provided by one travel insurance policy compared to another can be substantially different.  It can therefore be difficult for consumers to understand what they are covered for, and perhaps most importantly, what they’re not covered for.  This is why it is important for consumers to carefully check the policy details, particularly the small print, when obtaining travel insurance.

This approach by insurers to dealing with travel insurance claims may appear unfair to most consumers.  However, the Financial Ombudsman Service (FOS) has indicated that it is likely to uphold any complaints from consumers in such cases, but, as suggested above, has warned consumers to read the terms of policies carefully.  Over the past year the FOS received almost 2,000 complaints about travel insurance – a rise of 21% on the previous year.  It noted that many of the complaints it received involved interpretation of small print in policies.

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A report issued by the independent consumer advice organisation, Which?, has revealed that many UK airlines are still automatically adding travel insurance when consumers book their flights.  This is despite an EU directive issued last year which ruled that airlines should not automatically include travel insurance when consumers book their flights. 

Essentially, the problem is that consumers have to opt-out of automatically buying travel insurance when booking their flight, rather than taking the conscious decision to have it included – as the EU directive would prefer. 

Which? noted that EasyJet, Jet2 and Monarch all automatically include travel insurance as a default option when consumers book their flights.  Consumers booking flights with those airlines have to notice this and then untick an option box to declare their intention not to purchase travel insurance with their flight. 

As a result of this requirement to opt-out, Which? says many consumers may inadvertently purchase travel insurance with their flights – travel insurance they might not need because they already have adequate cover in place, or, if they do need the cover, travel insurance that is inadequate for their needs.  In addition to this, travel insurance purchased direct from airlines and high street travel agents is typically more expensive than travel insurance obtained online. 

For most consumers purchasing travel insurance at the same time as booking flights may well seem like the most sensible and convenient thing to do.  However, consumers should consider any existing travel insurance cover they already have in place.  Consumers without any existing travel insurance should consider shopping around and comparing travel insurance policies online to find the most suitable cover for their needs.  Numerous reports have shown that travel insurance purchased online is typically much cheaper than travel insurance purchased from a high street travel agent or direct from an airline.  Competition between online travel insurance providers is intense, which means consumers can obtain cover online relatively cheaply. 

Which? also expressed concern at the quality of the travel insurance policies sold by airlines.  For instance, one airline’s travel insurance policy only provided £200,000 cover for medical expenses – not the £1 million minimum cover included with most travel insurance policies and as recommended by Which? 

Another airline’s travel insurance policy only provided cover of £500 for cancellation or curtailment – not the £3,000 minimum cover, as recommended by Which? 

This again highlights the need for consumers to avoid focusing on the cheapest price when comparing travel insurance quotes.  Rather, consumers should instead focus on the cover being provided to ensure it is suitable for their specific needs.  There is little point in purchasing travel insurance if it fails to provide the cover required in the event of a claim. 

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One of the UK’s leading finance comparison websites, Confused.com, has revealed that enquiries on its website for travel insurance have increased by 63% compared to this time last year.

One possible explanation for the substantial increase is that consumers remain fearful of the spread of swine flu and that it could lead to their holiday being cancelled, and thus being out of pocket – unless, of course, they have adequate travel insurance cover to protect them.  UK consumers are becoming increasingly aware of the benefits of having adequate travel insurance and the peace of mind it brings.

It would seem that many consumers are taking the sensible approach of thinking about their travel insurance arrangements several weeks prior to their summer holidays, rather than leaving it until the last minute.  Those consumers who fail to consider travel insurance until the last minute typically purchase travel insurance cover from a travel agent when booking their holiday.  This is not a wise move since it widely accepted that travel insurance purchased from high street travel agents is likely to be significantly more expensive than travel insurance purchased online.

Having adequate travel insurance is vitally important for consumers travelling abroad since it protects themselves and their belongings while they are away.  If baggage is lost or the consumer becomes ill on holiday then having travel insurance could save a lot of hassle.

Confused.com is expecting the increased number of travel insurance enquiries placed through its website to continue throughout this summer.

Historically, consumers have opted for annual multi-trip travel insurance.  Naturally, this is more expensive than single trip travel insurance.  Due to the recession consumers have less money to spend and are therefore less likely to go away on multiple trips during the course of the year.  As such, insurers have seen a shift towards more consumers purchasing cheaper single trip travel insurance, rather than the more expensive annual multi-trip cover.

The latest figures from the industry reveal that 55% of UK consumers purchase single trip travel insurance, compared to 45% who purchase annual multi-trip travel cover.  However, Confused.com says enquires made through its own website reveal that 70% of enquiries is for single trip cover, while 30% is for annual-multi trip cover.

Consumers are becoming increasingly savvy to the benefits of using price comparison websites, such as Confused.com, to find the best deal on their travel insurance.  As with most things, cheapest is not always best so it is important for consumers to read and understand what benefits and limits apply when comparing quotes.

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Many Brits intend to travel when they retire and it is well established that the number of older holidaymakers travelling has been steadily increasing over many years due to healthier lifestyles, and more time and money available.

However, many UK insurance companies will not provide travel insurance cover for consumers over 65 years old.  The few insurers that do provide cover typically charge significantly more for cover compared to consumers under 65.  The reason for this is not entirely clear.  Why do insurance companies deem a 66 year old person to be more risk than, say, a 64 year old?  What additional risk does that 66 year old consumer pose to the travel insurance company?  Are they significantly more at risk of claiming than the 64 year old to justify the substantial difference in cost?

The Government is keen to stamp out inequality and age discrimination in the provision of goods, facilities and services and public functions with its Equality Bill.  Once the Bill is passed, which is expected to be in autumn 2010, one of the benefits should be cheaper travel insurance costs for older holidaymakers – since insurance companies will not be permitted to make unilateral and unjustified increases to insurance costs simply because a consumer is over age 65.  In theory, an insurance company should not be able refuse cover based simply on someone’s age.  Where this legislation fits in with a business’s right to make commerical decisions about who it sells insurance policies to is not entirely clear.

Of the 68 listed travel insurer companies listed on a popular price comparison website, only 39% offered cover to a 65 year old man looking to purchase an annual multi-trip worldwide travel insurance policy.  Only 13% would provide cover for a 75 year old.

The insurance companies willing to provide cover for the over 65s seem to base the cost they charge on arbitrary age brackets, rather than based on any other meaningful assessment of a consumer’s circumstances.  For instance, according to a price comparison website, the cheapest annual worldwide travel policy for a 65 year old man costs £34.75.  However, the cost for a 66 year old man increased by a staggering 107% to £72.07 even on the basis that his state of health remained unaltered.  For a 75 year old man the cost of cover would equate to £166.17, but for a 80 year old man it would be a shocking £389.03.

Commentators in the industry who support the Equality Bill have questioned whether these older consumers are currently being treated fairly.  They can see no other reason why the cost of travel insurance increases so substantially with each year after age 65 other than it being based purely on someone’s age, rather than on their actual state of health and other circumstances.

It is hoped that the Government’s Equality Bill will banish such practices by insurance companies. 

However, some commentators say that even when the Bill is passed insurers will still be able to employ “appropriate age-based treatment” when quoting costs for travel insurance, so long as it can be justified.  Therefore, older consumers will probably be no better off. 

The Association of British Insurers (ABI) said that “block pricing” within travel insurance at various age brackets is not an unreasonable approach to take by insurance companies.  It noted that insurance companies have to draw the line somewhere when assessing applications and if they are forced by legislation to provide a quote on each consumer’s own individual circumstances it could mean sending those consumers for medicals – which will increase costs to the insurance companies, which would likely be passed onto policyholders in the form of higher premiums for their travel insurance.

Notwithstanding this, some insurance companies currently offering travel insurance may pull out of the market altogether which would mean less competition and higher premiums for consumers for their travel insurance.

Until the Equality Bill is passed, which if some commentators are to be believed should hopefully lead to cheaper premiums for the over 65s, older holidaymakers can still try and save money on the cost of their travel insurance by comparing quotes online and using price comparison websites.  It is important that when comparing travel insurance quotes online that consumers seek the right level of cover for their circumstances, rather than solely focusing on the cheapest price.  In addition, consumers should ensure that they fully disclose any pre-existing medical conditions to the insurance company.  This is likely to mean higher premium costs, but at least the consumer will have peace of mind that they should have at least have some cover if they claim rather than being told by the insurance company that the policy is void since they failed to disclose important information at the outset.

For older holidaymakers aged over 65 and currently looking for travel insurance cover, then they should consider Marks & Spencer travel insurance which provides cover to consumers up to the age of 80, and Churchill and Direct Line who do not impose any age limit for a single trip travel insurance.  However, Direct Line will only provide cover up to age 65 on annual travel insurance cover.  Churchill’s annual worldwide travel insurance policy also covers consumers up to age 65 and will cover consumers up to age 99 on European trips.

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It has been reported that in the current economic climate many UK consumers are delaying making any decision about their holiday arrangements until the last minute.  This is understandable since money is tight for many consumers at present and they might be able to bag themselves a holiday bargain if they book at the last minute. 

However, such consumers who are waiting until the last minute to book their holiday have been urged not to accept the travel insurance policy offered by the travel agent at the last minute also since they tend to cost more money than travel insurance purchased from other sources, such as online. 

Consumers should consider their travel insurance needs several weeks in advance of any proposed holiday so that they can fully compare travel insurance from different providers to make sure they get the right cover at the most competitive price for their circumstances. 

In 2008, travel agents sold 40% of all travel insurance policies in the UK, but it has been shown that purchasing travel insurance from a travel agent together with a holiday can prove expensive compared to purchasing a stand alone travel insurance policy. 

Finance comparison firm, Confused.com, has conducted research which reveals that the lowest price travel insurance policy for one adult for a week in Europe is £9.17.  However, a similar travel insurance policy sold by travel operator, Thomas Cook, is almost double that at £16.99.  For a family of four, cover at the lowest price was £14.75.  The most expensive policy with similar cover was from a high street travel agent and came in at £54.00.  This significant difference in cost reveals the profit being made by travel agents on the travel insurance policies they sell.  Purchasing annual travel insurance cover from a high street travel agent also reveals similar levels in difference in cost.

In light of these findings, Confused says while it is important for UK consumers to have adequate travel insurance in place before they book their holiday, they should not feel obliged to accept the travel insurance offered by the travel agent.  Instead, consumers should shop around and compare travel insurance to get the best deal for their circumstances.

While paying the lowest price possible for travel insurance is obviously a key consideration in shopping around, consumers should bear in mind the importance of not just focusing on the price of the policy.  Like most things, cheapest is not always best and it is important that consumers fully read and understand what they are covered for under the travel insurance.

When comparing travel insurance quotes, consumers should expect the following key features as a minimum requirement to ensure that they are fully protected:  £2 million for medical expenses cover, £1 million personal liability cover, enough cancellation to cover the total cost of the holiday, baggage cover of £1,500 and £250 for cash.

It is worth bearing in mind that some home contents insurance policies may provide cover for baggage which means that paying for protection for possessions under a travel insurance policy may not be necessary.

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Intune, a subsidiary of Help the Aged and Age Concern England, has discovered that nearly 25 % of consumers over 60 do not regularly review their personal  finances.  Instead, this group of consumers rely on financial advisers or other family members to provide them with advice and guidance on their money. 

A further 15% of the over 60s fail to review whether the cover being provided by their existing insurance policies remains appropriate, and 10% fail to review the rates of interest being received on their savings and whether this could be improved.

It is wise for all consumers, not just the over 60s, to carefully review their existing financial arrangements to make sure they are getting the most out of their money.  By regularly reviewing and comparing existing financial arrangements it could be possible to find similar or better cover at a similar or lower cost.  However, it is important for consumers to remember that cheapest isn’t always best.  Some insurance policies might be cheaper than others, but they may not offer the same level of cover or protection. Consumers have different needs and different circumstances, and what might be right for one consumer might not for another. 

Intune noted that older consumers have become more cautious with their savings, possibly due to the high profile collapse of several financial institutions in the UK.  This has lead to many older consumers spreading their savings, and thus risk, across several different banks and building societies.

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Some UK travel insurance companies have been accused of acting unreasonably for refusing to compensate policyholders for not travelling to Mexico, according to Which?, the consumer rights’ campaigner.

Many UK holidaymakers who have have followed official Government advice not to travel because of the swine flu outbreak have discovered that they cannot claim a refund of the cost of their holiday under their travel insurance policy.  Rather, some travel insurance companies are only offering to cover the cost of altering the holiday destination or dates by their airline or travel company.  However, some holidaymakers only want to go to Mexico and, quite reasonably, want to get a full refund if they cancel.  It has been estimated that up to 30,000 UK holidaymakers had arranged to visit Mexico in April.

Some travel insurance companies say that policyholders cannot claim a refund for the cost of their holiday since the terms and conditions of the policy do not cover holiday cancellations due to official Government guidelines.

Which? says that it is unfair and wrong for travel insurance companies to have such an exclusion in the terms and conditions of their policies because it is leading to thousands of holidaymakers being punished for following official Government advice. 

Within the travel and insurance industries there is differing views over whether most holidaymakers are entitled to a full refund from their travel insurance policy.

The travel association, Abta, seems to believe that most travel insurance policies won’t cover policyholders for this type of cancellation.  This is because most travel insurance policies do not cover holidaymakers who choose to cancel their travel arrangements of their own volition, regardless of any official Government advice.

However, the Association of British Insurers (ABI) thinks differently.  It insists that most UK travel insurance policies do cover this type of cancellation and that policyholders should check their policies carefully and speak with their insurance company.  The ABI said that it understood that most travel insurance companies will cover for this type of cancellation.

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In response to the outbreak of the swine flu virus, two UK holiday operators, Thomson and First Choice, have cancelled their flights to Mexico.

For those consumers who have already booked holidays to Mexico and other destinations which may be affected by the swine flu virus, what protection is there?

With regard to those consumers who have booked holidays with Thomson and First Direct, those particular tour operators have said that consumers have the option to make a free amendment to their booking, or to cancel their holiday and receive a full refund without incurring any cancellation charge.

Consumer Direct, a government-funded advice bureau, has said that UK travel insurance companies and tour operators should follow guidance issued by the Foreign and Commonwealth Office.

For those consumers who have travel insurance policies in place, their travel insurance providers are likely to cover them if their holiday is cancelled if the official advice being issued by the Foreign and Commonwealth Office is not to travel to affected countries.   However, each travel insurance policy is different so it is important for consumers to check that they are covered if they cancel their holiday.

Tour operators and credit card companies should also consider this official advice from the Government when dealing with any claims from consumers. Those consumers who spent more than £100 on their credit card for their holiday should be able to make a claim to their credit card provider to have the cost refunded to them – Section 75 of the Consumer Credit Act 1974 provides protection to customers who use certain types of credit to make purchases of goods or services over £100.  This includes holidays.

It is vital that consumers carefully read the terms and conditions in their travel insurance policies and travel documents so that they know exactly in what circumstances and events they are protected.

The Association of British Insurers (ABI) has also issued its response to the outbreak of the swine flu virus.  It has said that those consumers who are worried about travelling abroad should in the first instance talk to their tour operator or airline about the latest news on whether it’s safe to travel and also listen for any official advice from the Government.  The ABI said if consumers need to make alternative travel arrangements then they should usually be protected by their travel insurance policies which will usually cover the cost of the making alternative arrangements to a new destination.  However, the ABI warned that it is important for consumers to check the terms and conditions of their travel insurance policies as some insurers may not cover cancellation costs in these circumstances.

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The current economic downturn in the UK has lead, perhaps not unsurprisingly, to a rising number of fraudulent insurance claims during the past year.

According to the Association of British Insurers (ABI) approximately 107,000 insurance claims during the past year, worth a total of £730, were found to be fraudulent.  In once such case, a motorist pushed his own car over a cliff and attempted to claim on his motor insurance policy in order to raise funds to pay off his debts.

The increase in fraudulent claims is 30% higher than the previous year.  The ABI noted that fraudulent claims increase during a recession since policyholders who might be facing financial difficulties, perhaps caused by rising unemployment, seek any means possible to raise funds to meet their financial liabilities, such as bills and mortgage repayments.

The ABI noted that fraudulent claims were most common on home insurance policies, with 55,000 false or exaggerated claims detected last year.  Fraudulent motor insurance claims were the highest by value, at £360m.

It has been calculated that fraud adds an extra £40 a year to the average insurance policy premium.  The insurance industry therefore has a clear incentive to make it harder for cheats to claim which will, in turn, reduce the total value of claims paid out and lower insurance costs for honest customers.  In response to the ABI’s report, Norwich Union said the majority of insurance claims were still genuine and when assessing claims it looks for unusual remarks, whether a customer had made a series of claims, and whether a policy had just been taken out.

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