Technology protection not high enough
An investigation into the level of protection offered by some travel insurance policies when it comes to the policyholder’s electronic gadgets has found that many are still lacking when it comes to appropriate coverage
Research by the Daily Mail newspaper has looked in detail at UK travel insurance policies, finding that the ‘vast majority’ have a single item limit on them that falls well below the price of a new mobile phone. Interestingly, the majority of travel insurers respond to such criticism by saying that people often have such cover through their home insurance policy, but the Mail’s investigation also looked at the small print of home insurance policies and found that in most cases, adding cover for items taken outside the home incurs a charge as it is an optional extra. This means that a lot of consumers are left in a black hole of no cover, with home insurers suggesting items such as iPhones should be covered by a travel insurer, and the travel insurer passing the buck back to the home insurance company. The other option for consumers, which is buying specialist gadget or phone cover, has in the past been criticised for overly restrictive policy wording and non-payment of valid claims.
Martyn James, spokesman for the Financial Ombudsman Service, commented: “There is a clear gap between the cover offered by insurers and the type of items that are now routinely taken on holiday with us or [that we] have around the home.” Part of the problem, he said, is that insurance policies have not been updated to reflect the cost of replacement items.
Kevin Pratt, head of insurance for comparison website MoneySuperMarket, noted: “For some people, stand-alone gadget insurance or mobile phone insurance is the best option, especially if they don’t have a home contents policy they can use. But the excess on these policies can be high, typically around £100 for iPhones, so again consumers need to weigh up the annual cost of cover and the excess levels before buying a policy or making a claim. This protection is sometimes included in packaged bank accounts, but be mindful of the cover levels in case it isn’t high enough to meet your needs.”
Andrew Woolgar, policy adviser on travel insurance at the ABI said: “Although we are not aware of any widespread issues concerning item cover limits, we would expect our members underwriting travel insurance to regularly review their policy terms, in response to feedback from both customers and distributors, to ensure they meet customer needs. Over recent years we have seen many insurers make changes to travel delay and disruption cover, definitions of close relatives and moral hazard in response to market developments and claims experience.” He added: “It is important that distributors ensure customers are fully aware of the cover limits in place when buying travel insurance. We would generally advise consumers to insure their gadgets and valuable items both at home and abroad, either alongside their home contents insurance, or via a standalone mobile phone or gadget policy. In addition, many added value bank accounts already include both travel and gadget cover.”