Understanding travel insurance

By | Category: Travel tips & opinions

travel insuranceFor years, Just about Travel has urged that holidaymakers take out travel insurance in case the unexpected happens. The collapse of the Lowcost Travel Group which was not ATOL bonded in the UK and carried insufficient insurance in Spain for all of its holidaymakers leaving 117,000 British travellers unlikely to get even a fraction of their monies back highlights the problems when you have no travel insurance.

But do the travel insurance companies make it easy for us? They certainly are quick to sell policies but how transparently clear is it so we know what and what we are not buying? How can those policies that you will be able to buy in the future from machines at airports give us enough time to properly understand them?

From SunLife comes some results that perhaps could have been expected but, nonetheless, reveal that change has to come.

According to the insurer, it takes longer to understand the policy – that is if you read it all and properly digested it- than it would take to fly from Heathrow to one of Britain’s favourite destinations, Malaga in Spain.

SunLife says that it takes about three hours and thirty-three minutes to read through the average policy whereas it takes eighteen minutes less time to complete the flight. On average it says that an insurance policy contains about 25,669 words. I have read novels that were shorter! By my reckoning that amounts to something like 80-100 pages of a fairly standard size paperback. Does that not seem preposterous that policyholders should be expected to read that amount in order to understand what they are covered for and what they aren’t?

Understanding that policy might explain why another insurance company, Allianz, found that a third of submitted claim forms didn’t include the right documentation. Could it be that the only people that understand insurance policies are those working for insurance companies?

SunLife says that it takes about three hours and thirty-three minutes to read through the average policy whereas it takes eighteen minutes less time to complete the flight. On average it says that an insurance policy contains about 25,669 words. I have read novels that were shorter! By my reckoning that amounts to something like 80-100 pages of a fairly standard size paperback. Does that not seem preposterous that policyholders should be expected to read that amount in order to understand what they are covered for and what they aren’t?

It takes less time to sit through some of Shakespeare's plays than to read a travel insurance policy

It takes less time to sit through some of Shakespeare’s plays than to read a travel insurance policy

Shakespeare’s Romeo and Juliet takes about two-and-a half- hours to watch in the theatre. Why mention this? Because SunLife have calculated that an average insurance policy has more words in it than that Shakespearean masterpiece has. The average insurance policy is longer than Macbeth or Twelfth Night and only about half as long as Kurt Vonnegut’s Slaughterhouse Five or a third the size of Harry Potter and the Philosopher’s Stone  and that looked pretty thick and daunting when I bought it years ago.

In order to arrive at this count, SunLife looked at six different travel insurance policies, not just their own.  In all, they looked at thirty different policies and of those, the policy for travel insurance was the longest beating policies covering car, health, home and life insurance policies. Travel insurance policies turned out to have 18% more words in it than any other of the insurance policies that SunLife researched. Why are so many words needed?

For years, people have referred, derisively to “small print” meaning it to be something few of us read and containing the get-out clause which negates the policy that we thought covered us. It contains the bit that says the policy covers us for everything that we would ever expect to do but only when there is an “x” in the month. Is it any wonder then that the research found out that we ignore 85% and typically read just 15% of what we’re sent – meaning millions of us may not know much about the cover we’re paying for.

SunLife have decided to alter life for us by saying their insurance documents would contain only about a sixth of the words  that currently consitute a travel insurance policy– about 4,500 words – which is still longer than a school essay and about four times the length of a Just about Travel feature.

Ian Atkinson from SunLife says. “People spend an average of 27 minutes reading their insurance so perhaps we shouldn’t be creating policies that take many more minutes than that to read.” In other words, instead of spending all the time that SunLife says we require to read and understand the policy, we are using just 12.6% of the time. I take that to mean that we can’t be really understanding the policy in such a short period as 27 minutes.

This is a start but only that. How many more times must people be told that travel insurance is necessary before they buy policies?  Perhaps when travel insurance policies are easier to read. It is to be hoped that other insurance companies follow SunLife’s lead.

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