What is the purpose of insurance?

[Deleted User]

I know this sounds a silly question, but we were two of the customers caught up in the Eurostar mess before Christmas.

We'd booked a trip to Disneyland Paris (for my birthday) through lastminute.com but because Eurostar was cancelled, we couldn't get there. Eurostar are allowing customers to claim expenses, but we're expecting to lose £100 on 2 x tickets to a Disney show on our first night, along with our hotel (although lm.com are trying to negotiate with the hotel).

I have spoken to Eurostar who have said they will process our expenses claim but anything they reject will have to be claimed via my insurance. Given the excess is £150, there is little point in doing this.

But this got me thinking: what is the purpose of insurance?

I'm a bit concerned that travel insurance is not protection for the consumer, but protection for the organisation providing the service. If Eurostar break down, why is the onus on me to claim on my insurance for their failings? Surely the onus is on them to correct their failings and then my insurance picks up the difference?

Do you see what I'm getting at?

Insurance is there as a last-resort back-up, to help the consumer. It's not there as a substitute for the other party's obligations, surely? If Eurostar breaks down and fails, then it's failed in its obligation to get us from A to B. Us claiming on our insurance ensures we are not financially disadvantaged, but surely Eurostar should shoulder that responsibility?

Just worries me that insurance is starting to replace customer service.

taxi97w

There's nothing sure about insurance, in my book.

[Deleted User]

But do you get what I mean?

Insurance protects you against loss.

But if a business fails in its obligations to you, surely they still have an obligation to rectify it? To say 'your insurance covers you in this instance' - although correct - is diverting attention from their obligations, right?

Proc

It sounds like your issue is actually with Eurostar's shoddy service, and not with the insurance company.

To be honest, insurers carry an excess so that they're not wasting time and money dealing with mundane claims for a bus trip to a different airport, lost digital camera etc. A claim of say, £100, probably costs a lot more to actually deal with than the value of the end payment.

To answer your question more directly, the main point of travel insurance (in my opinion) is related to the illness and health side of things. Remember that couple that were murdered on their honeymoon in Antigua last year? The cost of bringing their bodies home would have mounted to many thousands of pounds. A cost that their family would have been footing had they not been insured.

Also, if you fall ill abroad, sometimes you're given orders to not fly. So, you have to get a hotel for another week or two, book new flights, as well as paying for medical treatment. A simple stomach bug can potentially cost thousands of pounds to rectify.

I think people expect too much from insurance companies. They expect to use them for every small loss, expense, and inconveniance. In all fairness, it's only worth insuring those things that you can't afford to lose.

DVardysShadow

Deleted_User wrote: »

I have spoken to Eurostar who have said they will process our expenses claim but anything they reject will have to be claimed via my insurance. Given the excess is £150, there is little point in doing this.

... Just worries me that insurance is starting to replace customer service.

This is Eurostar trying to palm off the costs away from themselves. If they do reject your claim, you can still claim via the small claims court - unless the conditions of carriage rule out your claim. In your position, I would be putting in for the lost shows etc.

jammy26

can't you claim in full from your travel insurance and then claim from Eurostar for the excess you have to pay?

pinkshoes

This is the gamble you take on booking parts of your holiday separately, and then taking out holiday insurance with a high excess.

i.e. if you'd booked the whole thing through a travel agents, including eurostar, hotel, and disney tickets, then the travel agent ought to be the ones responsible for refunding the whole thing, as they failed to supply the holiday you'd booked.

If you book everything separately, then each event is independent, so that's what insurance is for i.e. the eurostar being cancelled is not related to the hotel you've booked and the tickets, so you'd have to claim the latter two on your insurance, and the eurostar refund from eurostar.

If I'm booking a holiday separately rather than through a tour operator (often cheaper!), then I make sure my excess on the insurance isn't too much.

[Deleted User]

Hello - sorry for the delays in replying.

I booked it all as one via lastminute.com, but lm.com just creates individual contracts with individual providers, so recourse isn't with them.

As it turns out, I'm not out of pocket, but my original post was more theoretical than anything: it just struck me that travel companies rely on customers' insurance policies to remedy their own errors, if that makes sense.