Travel insurance complaints increase

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By Jonathan Thomas
Know Your Money Editor

A number of Britons may be set to head off on holiday in the near future and may benefit from taking a little time to compare travel insurance deals to ensure it meets their requirements.

According to a recent report from the Financial Ombudsman Service (FOS), grievances about travel insurance rose by almost one third in the first three months of this year.

It reported unhappy holidaymakers made more than 500 complaints to the industry body, a 28 per cent increase on the number seen in 2009.

Officials have been unable to cite a specific reason for the climb as the figures do not include issues triggered by the ash cloud seen earlier this year.

It did however admit the numbers are just one indication about the number of problems as they also fail to cover consumers who resolved the issue with their insurer or gave up because they were unaware of the FOS.

Financial Services Ombudsman Bill Prasifka commented: "The years ahead will continue to be challenging. Complaints will be likely to continue to increase. The continuing financial and economic crisis will place increased demands on the FOS."

A right to complain

Consumers may find it is wise to complain as the group reports it has found in favour of customers 50 per cent of the time.

Emma Parker from the FOS told Radio 1 a number of insurers are currently reluctant to make payouts for claims.

The radio station suggests some insurers are telling customers they need to provide receipts for every single item in their lost luggage.

However, it also points out that some customers are making fraudulent claims, while others are expecting too much out of their insurance deal.

Ms Parker said: "Excesses do apply to insurance. That means there's an amount the insurers expect you to pay before they will pay your claim. But it is important to be realistic."

She adds the first port of call for unhappy consumers is to lodge a complaint with their insurance firm.

The ombudsman can then become involved if a resolution is unable to be reached.

The Mirror highlights a couple of examples of situations where insurers have been forced to make payouts. It notes the case of a woman who had to fly home after injuring her ankle abroad and a Brit who had to catch a plane after a French rail strike disrupted her plans.

It states these were among 40,000 total complaints to the FOS in the first three months - across all sectors.

Insurers explain their stance

Newsbeat reports the Association of British Insurers claims it paid out £200 million last year for items that had been lost or stolen on holiday.

It claims it is necessary for it to be rigorous about verifying all claims, because some customers are dishonest.

Spokesman Malcolm Tarling said: "Last year, travel insurers detected frauds worth £5 million on travel insurance. Clamping down on the dishonest minority, enables competitively priced travel insurance to continue to be available to the honest majority."

Do your research

With this information in mind it may be wise for those planning to travel to shop around to find the best value and most appropriate deal for their requirements.

For example those going on a winter sports break could be wise to opt for a different deal than someone planning to spend a week by the pool.

Travel insurance can cost as little as a few pounds but might potentially save huge sums of money, in the unfortunate event of an unexpected incident occurring.

It may be worth thinking about obtaining adequate cover for cancellations, flight delays, medical expenses in case of illness or injury to give peace of mind as well as financial protection.

Consumers might like to take a look at the Travel Insurance Guide to find out about the range of different types of cover available to them.

Important Notice
This guide is intended for general information only and is not intended as, and does not constitute, any form of advice, recommendation or endorsement by us of any particular product(s) or services and you should rely on your own further research and professional advice in relation to your specific requirements and circumstances before purchasing any products or services. Use of this guide is subject to the Terms of Use of the KnowYourMoney site.