The decision by some insurance companies to refuse to cover passengers for cancellations or lost luggage at Heathrow’s Terminal 5 has today been labelled as “scandalous” by leading travel insurance company InsureandGo. Several insurers are refusing to cover passengers due to the chaos at the terminal since its opening last month.
Perry Wilson, Managing Director of InsureandGo, comments: “This decision taken by numerous insurers is going to add to the misery suffered by airline passengers over the past few weeks, and frankly we think it’s outrageous. Some insurers are hiding behind the excuse that problems at T5 are not ‘unforeseen’ because they have been going on for weeks. That is like saying you’re not going to cover someone against being mugged in Johannesburg because crime is so rife there.”
One insurer said that passengers who had taken out insurance since the opening of T5 would not be covered, but those who had bought their policy before its opening would. InsureandGo is still covering T5 passengers for lost luggage and flight cancellations at the terminal.
The good guys:
Norwich Union - will cover Terminal 5, even when issuing new policies.
The bad guys:
Direct Line - only considering individual claims on their merits, so customers are not covered unless the insurer feels kind, and they have no automatic right to a claim under their policy. No cover at all for new policies.
Also - those unnamed insurers who are following Direct Line’s practice, but are too ashamed of themselves to admit it in public.
Ironically, on April 1st, Chris Price, Direct Line's head of travel insurance, said: "The problems at Terminal Five have highlighted the importance of purchasing travel insurance, as arriving at a destination without your baggage can be a huge inconvenience and be costly to replace."
So the first you will know of the ban is when you try to claim for baggage lost or stolen – not at all a satisfactory state of affairs.
Insurers may try to wriggle, but legally and technically, seeking to change what cover they will or will not pay for, after a policy has been taken out – is against the basic principles of insurance, insurance law, contract law, and the FSA basic rule that insurers must treat all customers fairly.
Travel insurance: News update: April 2008