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Insurers using ‘opt out’ loopholes in policies

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More and more travel insurers are opting out of covering clients when a medical condition arises after purchasing the policy.

Customers who take out a policy then have their conditions change before departing on their trip are often being told to pay a higher premium or lose their coverage, even though they already have a signed and paid for a policy, Which? reported.

Insurers are able to this because, although the customer is committed to a policy once they buy it, many insurers include “ongoing medical warranties” in their policies which give them the option to leave if they no longer want to insure the client.

This is despite the Financial Ombudsman Service (FOS) ruling eight years ago that it is unfair for insurers to do this. The FOS said that it is only reasonable for an insurer to opt out of insuring a client if there was a change of circumstances “so fundamental that the risk being insured [becomes] completely different”.

Not all insurance companies are including ongoing medical warranties in their policies. Some of the companies Which? found that didn’t use them included AXA Insurance, Freedom Travel Insurance and Miaonline.co.uk. These companies said they would continue to insure a customer if a GP is OK with the trip going ahead.

According to Which?, the FOS is now receiving more complaints about the issue than ever before; about 40-50 complaints every month up from about 20 a month three years ago.

Which? said that The Association of British Insurers is currently carrying out a review of travel insurance products to improve issues such as this.