Kenyan conundrum
Travel insurers basing their coverage decisions on travel advice from government agencies have hit the headlines in the UK recently. Mandy Aitchison looks into the issue
Travel insurers basing their coverage decisions on travel advice from government agencies have hit the headlines in the UK recently. Mandy Aitchison looks into the issue
The UK’s Foreign and Commonwealth Office (FCO) has advised against ‘all but essential travel to coastal areas within 150 km of the Kenya-Somalia border’. It further explained: “We advise against all but essential travel to coastal areas within 150 km of the Somali border, following two attacks by armed gangs in small boats against beach resorts in the Lamu area on 11 September and 1 October 2011. This advice will be kept under review. Both attacks were on beach-front properties, with two Westerners kidnapped and one murdered. Beach-front accommodation in that area and boats off the coast are vulnerable.”
Customers with holidays booked to that area, though, are being told they can’t cancel their holiday and claim on their travel insurance policy because of a ‘disinclination to travel’, and they must approach their tour operator to find an alternative destination if they do not wish to go on their planned holiday. While for most holidaymakers, re-booking to an alternative destination would be acceptable, there are bound to be customers for whom re-booking is not an option, and they just wish to cancel and get their money back.
The justification for the stance taken by travel insurers, given by esure to UK newspaper The Guardian, is that ‘insurers could not base coverage decisions on warnings issued by the FCO because “these change from one day to the next”’. ITIJ read esure’s travel insurance policy wording, though, which states under the general exclusions part of the policy: “This insurance will not pay for any deterioration of or loss or damage to property, or any legal liability, injury, illness, death or expense, directly or indirectly due to, contributed or caused by: Any travel undertaken against Foreign Office advice or where the Foreign Office has deemed it unsafe for you to travel.” So, a policyholder can’t claim for cancellation on their travel policy, but it won’t cover them if they do decide to travel to the area included in the FCO warning?
Damned if you do, damned if you don’t
It seems that this is exactly the sort of issue that gives travel insurers bad PR, and insurance haters in the global press a chance to bash insurance companies. Giving conflicting signals over the heeding of FCO travel advice, and leaving uncertainty about the meaning of the word ‘essential’ when referring to ‘all but essential travel’ does little more than alienate consumers who often view insurance companies as, at best, a necessary evil, and at worst, opportunists who make money from other people’s need for peace of mind.
Part of the problem the last time the travel insurance industry last faced a consumer backlash – when the ash cloud from Iceland was hovering – was that there was no cohesive industry advice, and no common message to consumers, other than ‘check your policy wording’. Again, with the Kenyan situation, different insurers offer different cover to consumers – some providing very limited cancellation cover, some providing cancellation for ‘any reason’, and some naming FCO advice as a peril for cancellation in their policy wording. Some of this cover is offered as an add-on, as is the case with Aviva, which has recently included travel disruption cover add-ons to their travel policies. A spokesperson explained: “This offers wider cover in the event of strike, industrial action or cancellation due to FCO warnings, pandemics or natural disasters, including earthquakes and tsunamis, preventing your departure from the UK; and also similar cover for abandonment of your holiday if you have to return home early due to any of these events.” A blogger on The Guardian’s website posted that Aviva had emailed them to clarify the company’s cover, saying: “This optional add-on will provide cover if the FCO advise against all travel, or ‘all but essential travel’ in the seven days prior to your intended departure date, as well as abandonment cover, if after you are on your trip, the FCO advises UK residents to leave the area in which you are staying.”
For those companies, such as esure, who won’t cover for cancellation following FCO advice, but who, at the same time, won’t provide cover if the traveller goes ahead with the planned trip, claims are often covered on a one-by-one basis. ITIJ spoke to esure, who said: “While there is no cover for FCO cancellation under the esure wording, if a customer has been unable to reclaim their outlay or obtain an alternative holiday from the tour operator or airline, we would always look carefully at individual claims, as it is certainly not the intention of the policy to encourage people to travel without any cover.”
While it is considerate of insurers to provide such a service, unfortunately, for consumers who face the frustration of choosing between whether or not to travel, based on their policy wording and FCO advice, the damage may have already been done.