MSE News: Travel insurers told to treat holidaymakers who've had a drink fairly

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The Financial Ombudsman Service urges travel insurers to be fair when considering claims where people have had a drink ...

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Travel insurers told to treat holidaymakers who've had a drink fairly




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zagfles

I think a lot of people miss this issue - some policies have a blanket exclusion eg saying no claims will be paid if you were "under the influence" of alcohol (you're "under the influence" after one drink!).

michaels

On this one I am with the 'victims' - for a large proportion of people drinking alcohol is part of a normal holiday experience so trying to exclude holiday coverage on this basis (even via clear T&Cs) seems like an unreasonable condition to me. I can understand that perhaps 'excessively drunk' might be evidence of 'failing to take reasonable precautions' but 'tipsy' or even 'drunk' seem to me a normal part of the holiday experience for many.

InsideInsurance

michaels wrote: »

'tipsy' or even 'drunk' seem to me a normal part of the holiday experience for many.

As skiing is for many others but you have to pay extra for that to be covered.

You could argue that perhaps it should be an optional extra just as dangerous sports are but there is no reasonable way to judge alcohol consumption outside of breath or blood test and you simply arent always going to be able to convince the doctors to do such a test because you need it for your insurance claim.

When I dealt with travel for a short while the guidelines were fairly clear, if the doctor felt it necessary to mention alcohol the claim was questioned. If the doctor stated that alcohol was a factor in the injury/sickness then the claim was rejected (with the exception of some high profile cases or death (which tend to be high profile anyway)).

Realistically if you've tripped and sprained your ankle a doctor isnt going to bother mentioning the fact you had a mimosa 6 hours earlier at breakfast

zagfles

InsideInsurance wrote: »

As skiing is for many others but you have to pay extra for that to be covered.

Skiing isn't something the vast majority of adults do when on holiday. Drinking alcohol is.

You could argue that perhaps it should be an optional extra just as dangerous sports are but there is no reasonable way to judge alcohol consumption outside of breath or blood test and you simply arent always going to be able to convince the doctors to do such a test because you need it for your insurance claim.

When I dealt with travel for a short while the guidelines were fairly clear, if the doctor felt it necessary to mention alcohol the claim was questioned. If the doctor stated that alcohol was a factor in the injury/sickness then the claim was rejected (with the exception of some high profile cases or death (which tend to be high profile anyway)).

Why were high profile cases different? Didn't they want headlines highlighting their practice of not paying up when alcohol was involved? Surely if high profile cases were rejected people would gain greater awareness of this exclusion. But I guess insurance companies don't want that.

InsideInsurance

zagfles wrote: »

Why were high profile cases different? Didn't they want headlines highlighting their practice of not paying up when alcohol was involved? Surely if high profile cases were rejected people would gain greater awareness of this exclusion. But I guess insurance companies don't want that.

Basically yes, insurance terms are the minimum level of service. An insurer can always choose to give you something better if they want to just as a company that sells washing machines could choose to fix an issue outside of warranty if it wanted to.

Ultimately they are there to make profit and negative PR can easily cost more than a claim.

zagfles wrote: »

Skiing isn't something the vast majority of adults do when on holiday. Drinking alcohol is.

In a survey done a number of years ago over 90% of people said they'd commit insurance claim fraud. Just because the vast majority do it doesnt mean it should be ok

zagfles

InsideInsurance wrote: »

Basically yes, insurance terms are the minimum level of service. An insurer can always choose to give you something better if they want to just as a company that sells washing machines could choose to fix an issue outside of warranty if it wanted to.

Ultimately they are there to make profit and negative PR can easily cost more than a claim.

Why is it "negative PR" to refuse a claim when a specific exclusion is correctly applied?

That would mean it's negative PR to highlight their own T&Cs. This would imply they don't want people to become aware of their T&Cs.

In a survey done a number of years ago over 90% of people said they'd commit insurance claim fraud. Just because the vast majority do it doesnt mean it should be ok

No it shouldn't be OK. Nor should excluding an activity the vast majority of people do on holiday, without making it crystal clear rather than buried in T&Cs.

People should be able to assume travel insurance covers normal holiday activities, otherwise it shouldn't be called travel insurance. Or should be classed as specialist insurance for teetotallers.

InsideInsurance

zagfles wrote: »

Why is it "negative PR" to refuse a claim when a specific exclusion is correctly applied?

That would mean it's negative PR to highlight their own T&Cs. This would imply they don't want people to become aware of their T&Cs.

Because people arent rational. Teenager goes on first holiday abroad and dies trying to jump from their balcony into the pool whilst hammered. Makes headlines.

48 hours later parents are told XYZ insurance is declining the claim leaving them to pay 20k of emergency medical bills and their "baby's" body stuck in a foreign country.

Are you really thinking that the Sun or Mail are going to print a middle page story saying how this is fair application of the clearly written terms or this will be another front page story about the nasty insurers adding to the misery of the already suffering family?

3 weeks later when youre buying your travel insurance do you say, yes Ill buy from XYZ as they fairly apply their terms or say theres no way I'm buying from them after what they did to that family?

My ex used to deal with ASU claims and had a series of local rag newspaper clippings about claims she'd declined and those were minor stories let alone following something that was already front page.

zagfles wrote: »

No it shouldn't be OK. Nor should excluding an activity the vast majority of people do on holiday, without making it crystal clear rather than buried in T&Cs.

People should be able to assume travel insurance covers normal holiday activities, otherwise it shouldn't be called travel insurance. Or should be classed as specialist insurance for teetotallers.

Have you read any travel terms? Was it really not crystal clear or was it hidden in the microdot of an i somewhere?

The normal clause excludes cases where alcohol is a contributing factor. I dont know if the vast majority of people get drunk whilst on holiday? If you go by stereotypes then most brits do but then they also have unprotected sex by the same stereotype so perhaps STDs and the morning after pill should be covered?

Now I admit that club 18-30 was never my thing but since passing the age of thinking a good night couldnt be had without at least 10 beers and as many shots in my mid 20s I have to say the number of people I see drunk on holiday is very low. A bottle of wine or two sure, but sufficiently inebriated for a doctor to say the incident happened because of the volume of alcohol consumed rarely.

zagfles

InsideInsurance wrote: »

Because people arent rational. Teenager goes on first holiday abroad and dies trying to jump from their balcony into the pool whilst hammered. Makes headlines.

48 hours later parents are told XYZ insurance is declining the claim leaving them to pay 20k of emergency medical bills and their "baby's" body stuck in a foreign country.

Are you really thinking that the Sun or Mail are going to print a middle page story saying how this is fair application of the clearly written terms or this will be another front page story about the nasty insurers adding to the misery of the already suffering family?

How could it possibly be "nasty" to provide the cover stated in the T&Cs? Unless the T&C's themselves are "nasty"? That would be down to the reader to judge.

What really is "nasty" is for insurers to only pay claims because the cases makes the papers, because they don't want people to become aware of the exclusions in their T&Cs.

3 weeks later when youre buying your travel insurance do you say, yes Ill buy from XYZ as they fairly apply their terms or say theres no way I'm buying from them after what they did to that family?

Or "ooh, hang on, didn't they refuse to pay a claim because someone had been drinking? I like a drink on holiday, I'd better find an insurer who'll cover me".

What's wrong with that? Surely the insurers don't want customers who buy policies which are useless for them? That would be like selling PPI to the self employed, wouldn't it?

My ex used to deal with ASU claims and had a series of local rag newspaper clippings about claims she'd declined and those were minor stories let alone following something that was already front page.

So people are educated on what is and isn't covered. Any reason insurers should not want this to happen?

Have you read any travel terms? Was it really not crystal clear or was it hidden in the microdot of an i somewhere?

I've read mine. They are fine for me. They cover for reasonable alcohol consumption, but not "abuse". They clearly state they don't expect you not to drink on holiday, they just don't cover for where "judgement is seriously affected". For instance, I imagine, trying to jump of a balcony into a pool.

The normal clause excludes cases where alcohol is a contributing factor. I dont know if the vast majority of people get drunk whilst on holiday?

Err, who said anything about getting drunk? I've seen policies which have an exclusion for being "under the influence". You're "under the influence" after one drink. As for a "contributing factor", if someone trips on the way out of a restaurant it could easily be argued that the half bottle of wine they had with their dinner was a "contributing factor".

Yet such a claim probably won't make the papers, so they'd probably feel free to decline it. While paying out for those who get completely ratted and jump off a balcony, just because the Sun will end up telling everyone about their "nasty" exclusion.

InsideInsurance

zagfles wrote: »

How could it possibly be "nasty" to provide the cover stated in the T&Cs? Unless the T&C's themselves are "nasty"? That would be down to the reader to judge.

As the journalists who try to portray the insurer as being in the wrong for applying their terms accurately.

They probably wont answer you so why not ask the dozens of people that post on MSE in the insurance forum about how it can be allowed that insurers stick to the terms in their policy.

zagfles wrote: »

What's wrong with that? Surely the insurers don't want customers who buy policies which are useless for them? That would be like selling PPI to the self employed, wouldn't it? So people are educated on what is and isn't covered. Any reason insurers should not want this to happen?

I didnt say there's anything wrong with it, I am just saying that alcoholic single mother tries to slash her wrists and the ASU policy refuses to pay because self harm is excluded from the policy (and arguably substance abuse and mental health issues) but the local rag wrote how horrible the insurer was being and how much more likely she is to do it again because of the actions of her insurers - obviously "naming and shaming" the insurer in question.

The insurer did nothing wrong but despite that they have local coverage saying they did. That will cost them business.

zagfles wrote: »

I've seen policies which have an exclusion for being "under the influence". You're "under the influence" after one drink. As for a "contributing factor", if someone trips on the way out of a restaurant it could easily be argued that the half bottle of wine they had with their dinner was a "contributing factor".

Unless there is explicit definition of a term it will fall to standard english use of it. Whilst biologically you are correct in saying that a single drink would have an impact on you I do not believe that would fall under the common useage of the term "under the influence".

As to half a bottle of wine, this is where we get into the issues with these sorts of subjective things. Half a bottle of wine is something that some people have at lunch and you'd never know, for someone else they'd be half naked and dancing on the tables after that much. You also have other contributing factors such as how recently you'd eaten as to how much you are impacted by it.

The insurer wasnt there to see how you were. A breath test wasnt done to confirm how much you'd had to drink. Insurers have to fall back on the medical expertise of the doctor that treats you and their expert opinion on if alcohol was a contributing factor of the incident.

The alternative of cause is that we all agree to pay 50 quid a year more for annual cover and the alcohol clauses are removed but with the race to the bottom thats been pushed by the aggregators this is highly unlikely to happen. If a single insurer removes it then the increase as to be notably more as they then suffer negative selection

zagfles

InsideInsurance wrote: »

As the journalists who try to portray the insurer as being in the wrong for applying their terms accurately.

They probably wont answer you so why not ask the dozens of people that post on MSE in the insurance forum about how it can be allowed that insurers stick to the terms in their policy.



I didnt say there's anything wrong with it, I am just saying that alcoholic single mother tries to slash her wrists and the ASU policy refuses to pay because self harm is excluded from the policy (and arguably substance abuse and mental health issues) but the local rag wrote how horrible the insurer was being and how much more likely she is to do it again because of the actions of her insurers - obviously "naming and shaming" the insurer in question.

The insurer did nothing wrong but despite that they have local coverage saying they did.

They should sue them for libel then, if there's factual inaccuracy. But the reality is that it's nothing whatsoever to do with whether the insurer did or didn't do anything wrong in handling the claim, is it. The issue is that the insurance company doesn't want their exclusions highlighting.

That will cost them business.

I'm sure it will.

It's odd how the banks got done for mis-selling PPI to the self-employed or others for whom the policy is useless, but you still get travel agents selling a holiday to a bunch of 20 year olds going to Magaluf or Playa de las Americas, or an AI holiday having sold it on the basis of unlimited free booze, and then push an insurance policy which has a specific exclusion of being "under the influence" in its terms!

Unless there is explicit definition of a term it will fall to standard english use of it. Whilst biologically you are correct in saying that a single drink would have an impact on you I do not believe that would fall under the common useage of the term "under the influence".

As to half a bottle of wine, this is where we get into the issues with these sorts of subjective things. Half a bottle of wine is something that some people have at lunch and you'd never know, for someone else they'd be half naked and dancing on the tables after that much. You also have other contributing factors such as how recently you'd eaten as to how much you are impacted by it.

Half a bottle of wine will put you above the legal limit for driving in most countries, so it clearly fits the definition of "under the influence". It's also one of the most natural and common things to do on holiday, share a bottle of wine over dinner.

People shouldn't have to worry about insurance when simply having a bottle of wine with their dinner. Yet if they have a policy with an exclusion for being "under the influence", they really ought to.

The insurer wasnt there to see how you were. A breath test wasnt done to confirm how much you'd had to drink. Insurers have to fall back on the medical expertise of the doctor that treats you and their expert opinion on if alcohol was a contributing factor of the incident.

The alternative of cause is that we all agree to pay 50 quid a year more for annual cover and the alcohol clauses are removed but with the race to the bottom thats been pushed by the aggregators this is highly unlikely to happen. If a single insurer removes it then the increase as to be notably more as they then suffer negative selection

The alternative is to make sure the insurance is not mis-sold. Where there is an "under the influence" exclusion this should be mentioned clearly in the policy summary, not buried in the small print like other stuff such as bungee jumping, which only a tiny % of people do.

Where a travel agent sells a type of holiday where they know consumption of large amounts of alcohol is likely, they should be done for mis-selling if they push insurance which doesn't cover this. Just like the banks were for selling PPI to the self employed.

This could of course mean the required insurance is more expensive, but so what, there is insurance that covers winter sports which is more expensive than insurance which doesn't. I don't ski so I don't pay the insurance premium for ski-ing. What's wrong with the same for drinking? I've no objection to tee-totallers getting cheaper insurance.

So insurers are willing to cover dangerous activities such as bungee jumping, hang-gliding etc, subject to an increased premium. Why aren't they offering similar "dangerous activity" insurance for the bunch of 20 year olds off on a typical holiday to Magaluf?

Or don't they want to remind people of the alcohol exclusion in their standard terms?