(In/un)valuable insurance

My travel insurance is up for renewal.

Well, it isn't “up for renewal”. I was told that it was automatically being renewed, and that I could contact them to opt out of automatic renewal if I wished.

That annoyed me. There was no box to tick or untick to say whether you wanted automatic renewal - it is a part of the policy and you have to actively opt-out.

Now, I will say one thing for this particular insurer - they did at least email me before it was renewed. There are many complaints to BBC Radio Four's MoneyBox programme about money simply being taken from debit cards with no warning - people haven't been told at the time they took out the policy that it automatically renewed, and they haven't be advised of it afterwards either.

But anyhow, I cancelled and started to shop around. I am going on holiday - ironically the day after the insurance expires - so I thought I would have a look into what was around.

Nothing.

That can't be right, can it?

Oh, there were policies - thousands of policies - but for me the policies being offered were worthless.

Is that really the case?

Well, the problem is that I am a lawyer, so I go through the small-print with a fine-tooth comb. I also start out with a minimum set of specifications that I require.

For example, you have a number of initial options: do you want a single trip policy; or a one-year policy? Is it for Europe; the world excluding America; or the world including America (I'm still not sure why America is a special case).

But then there are the additionals.

Are you taking valuables? If so, how valuable? How much excess? Do you want airline insolvency cover? Volcano cover? (it is there now as an extra).

I made an assessment - I knew the airline and didn't need insolvency cover as it was highly unlikely to go under, so it was really just about the valuables and excess.

And this is where the policy was useless. But that may be because I'm not a woman or a rapper with considerable amounts of bling.

The reason I look at the excess is because I was considering travelling with my netbook and smartphone.

But smartphones - indeed mobile phones at all - are excluded from the list of valuables. I would need a separate smartphone policy for that.

So it's my netbook. The valuables section limits the value of valuables as a whole, but also to limit each individual item. Amongst the policies that I look at, all of them had an individual item limit of between £150 and £200.

My netbook isn't top of the range; but it is worth around £300. So I'm already £100 down.

One of the policies, very bizarrely, had a single item limit of £150. It then had an excess of £100. If my netbook had gone missing I would have gotten back £50. Brilliant. Especially when the policy itself cost £35, so essentially that's £15. So I'm not taking my netbook.

Now that's very simplistic and doesn't take into account multiple claims - where you claim because you got out on holiday and your airline went bust and in doing so they lost your luggage.

Also it doesn't take into account baggage loss - whilst individually my t-shirts may not be worth much, cumulatively there is probably quite a costly baggage whizzing around with me. Obviously if my luggage is lost on the way out, I have to buy clothes simply in the hope that the insurers will cover the loss. And that of itself can be a risk - as a solicitor by day I am more than aware that insurers will often do their utmost to get out of a claim. By - say - not calling in the loss within the first 48 hours, or by not reporting to loss of baggage to the airport policy it is possible to invalidate your claim. And where they do cover a claim it is for the second-hand value of the item, despite having to buy brand new.

But it just goes to show how very very carefully you have to look at the policy wording. Indeed, the comparison website that I used just simply had a tick for whether valuables were included in the policy or not - you then had to click through to the website and drag up the policy schedule to see exactly what the excess was; what the single item value limit was; what the total claim limit was; and what valuables were included or excluded.

Of course, I could obtain additional cover - the next level of cover had a single item limit of £500; and a cumulative valuables limit of £5000. But that policy also cost considerably more. Insurance is, afterall, a business - it makes the insurers a profit. It is not a private savings fund, which I would probably rather. I'm sure if I put as much away in an account as I spend on certain insurance policies I would have more money in return than if I ever needed to make a claim.

But it doesn't stop there.

What they do cover you for is a lot of things for which you are already covered.

So, the front page had big letters and stars around the headline which told you they would cover you if your flight was delayed! They would pay your hotel costs if you had to stay overnight, and give you an allowance.

Fantastic.

But that is useless.

The reason? Most airlines operating in the European Union are bound by EU regulations to offer such assistance anyway - and the insurance schedule makes clear that where the airline covers these costs, the insurance doesn't.

So really all it came down to was health insurance - the cost of repatriating me in the event that something happened to me.

I question the value of this particular element; however as it is, this particular holiday that I am going on is with my parents, so I can rely upon them should something happen to me. And whilst I am not throwing myself off mountains or diving with sharks, I am aware that nothing is without risk.

What I am not going to do, though, is pay through the nose to cover that risk on the basis of a lot of additional “benefits” which actually provide little or no benefit at all.