Don't get burnt by free travel insurance
28 October 2007
IF YOU have a credit card, then you probably have free travel insurance thrown in. But people who rely solely on this cover are being warned that they need to check the cover and read the small print carefully to avoid problems when they go abroad and need to claim.
'Free' insurance on credit cards is largely a phenomenon of the past four years. Nearly three-quarters of credit cards offer the cover. Banks are starting to offer similar deals and about a quarter of them, mainly those with monthly fees, include it.
But the Financial Ombudsman Service has noticed a rise in complaints about this 'free' insurance. There are three main types of problem with this cover. First, travellers need to be sure there is enough medical insurance included in the deal. Second, policies vary considerably and some are restricted. Third, many policies are not designed to last for several years.
On the level of cover, experts are concerned that some free deals could offer too little. Insurance industry consultant Steve Manton of M Consulting said: "Some of the free policies are really inadequate. With medical insurance, anything less than £5m is inadequate."
The Goldfish i24 card will pay out up to £5m per person but not all free cards are that good. Comparison websites warns that there are some cards which appear to offer medical expenses cover but only at a low level, under £350,000, and only if the person is travelling and falls ill as a result of a transport accident.
MoneyExpert chief executive Sean Gardner said: "You need to be closer to the £1m mark."
Some people may be prepared to take the risk - relying in the EU zone, for example, on the European Health Insurance Card system which provides to card-holding travellers the same national health service treatment that local residents would receive. The UK has similar arrangements with many other countries. Free care in state hospitals is available in both Russia and Australia, for example. But more Britons are travelling further afield to places where there are no such arrangements. And families can be bankrupted if someone has a health problem on holiday, needs treatment and then needs to be flown home with medical assistance on the plane.
The Ombudsman is finding that while claims on travel insurance are declining overall, they are increasing in the field of free travel cover.
Source : http://www.scotlandonsunday.scotsman.com
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