Thursday, 13 August 2015

Travel insurance - time for revolt

My car insurer has just demanded a premium renewal increase of some 40%. I'm hardly a boy racer and have made no claims since I took out the policy. Inflation is forecast to enter negative territory. How can they justify such a huge rise?  The answer, of course, is that this is one of those mysterious actuarial calculations whose workings we are never allowed to see. Take or leave it. It's time the Competition and Markets Authority cracked down on this scandalous lack of transparency.

OK - apart from the fact that I do affair amount of travelling by car, this policy is not, strictly speaking, a subject for these pages. But exactly the same thing has happened in the not too distant past to my year round travel insurance. Out of the blue my renewal premium was jacked up by something like 40%. In that instance the insurance company - I won't name and shame because I believe they are all the same - at least offered an explanation, albeit a fatuous one. I was told the increase had been prompted by heavy claims from skiers suffering injuries in the US. Given that the US and Canada attract only around 3% of the wintersports market between them - and that ski holidays in turn represent a relatively small proportion of the total taken - you may understand why I snorted in disbelief.


Off piste yes - heliskiing no


My deep scepticism towards travel insurers began many years ago when I discovered that a new life insurance policy wouldn't pay out if I was killed in a charter plane crash. There was not the tiniest speck of statistical evidence that the safety record of charter operators was more suspect than that of scheduled airlines.

I have since encountered other absurd anomalies, some of which I have already reported on this site, such as upper age limits as low as 69 - 74 for skiing cover when one company will insure you up to 100. Or the refusal of one firm to cover me to go heliskiing. Would they cover me to fly be helicopter to a remote snowfield? Certainly. Was I covered for off piste skiing? Indeed I was. But was I covered if I stepped out of the helicopter and skied off? No I wasn't. That was more dangerous, they said. But was it ok if I hiked to the same spot and skied down? Yes it was. Bonkers, don't you think?

One colleague, a highly regarded travel writing writer and broadcaster, says he switches travel insurance policies pretty well every year. But why should this be necessary?

I have no doubt many other consumers have gripes similar to mine - especially senior travellers who run into upper age limits and see their premiums rise because of highly suspect statistics purported to show that they are more likely to claim than younger travellers.
Oh yes, I nearly forgot. When I called the car insurance company to complain they instantly wiped £40 (about 40% of the premium increase) off the price. Well I never. Rise up and put pressure on the authorities until something is done

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