Millions of travellers with pre-existing medical conditions should soon be able to find appropriate cover more easily thanks to new rules from the Financial Conduct Authority
Many travellers with existing conditions find trying to obtain insurance difficult – some are declined cover, offered cover with exclusions for their condition or simply offered unaffordable premiums.
The FCA has told insurance firms that if they cannot offer a customer with a pre-existing medical condition cover, they must direct them to a list of companies that can help.
These insurers will be specifically chosen as ones that are willing and able to cover those with medical conditions.
Travellers with pre-existing medical conditions should be able to find cover more easily
Switching to a specialist provider could save consumers with more serious pre-existing conditions around 40 per cent on their premiums, the FCA said.
It is estimated that 14.1million consumers with pre-existing medical conditions search for travel insurance each year.
Of those, 0.7 per cent are declined cover whilst 11 per cent purchase policies which exclude coverage for their condition, according to the FCA.
After concluding its consultation, it decided that firms will only have to direct a customers to another firm where they have a pre-existing medical condition loading of £100 or more.
Loading is another name for the additional charge handed out because of underlying condition.
It has also been ruled that signposting should be provided at the point the firm gives a quotation, on renewal of the policy, on annual eligibility statements, or if a mid-term adjustment results in a new quotation.
The directory will be put together by the Money and Pensions Service and is expected to be completed by the summer.
It will be able to filter providers based on factors such as age, destination and duration of trip.
Consumers will be shown information about all providers listed on the directory that may be able to help, based on these filters and can then decide which of the filtered providers they wish to contact.
Insurers will have to put the changes in place by 5 November 2020.
Consumers with pre-existing conditions could save 40% by switching to a specialist provider
Hugh Savill, director of regulation at the Association of British Insurers, said: ‘The vast majority of consumers can obtain travel insurance, including those with pre-existing medical conditions.
‘While we welcome the FCA’s changes to strengthen the current signposting measures, the £100 premium loading trigger must be carefully and thoroughly worked through to ensure that it delivers real customer benefits and makes the buying process as smooth as possible.’
A spokesperson for Defaqto added: ‘Travellers who have, or have had, serious medical conditions can find the current travel insurance market difficult to navigate.
‘Insurers often appear to have no clear approach as to which conditions may or may not be accepted, and customers have little idea of where to go if they are declined cover.
‘The proposed signposting could be a great step forward in assisting these customers. It is still unclear though as to the extent of information that will be provided to the website visitor when they access the new directory.
‘Customers may still find that they have to phone multiple insurers for quotes, with no clear indication beforehand of the likelihood of their being accepted.
‘This will be both time consuming for the consumer, and is likely to impact the call centre resources of the providers appearing in the directory.’
Although travel insurance is not compulsory, holidaymakers are strongly advised to buy cover as it can protect them from a range of problems that might arise before and during their trip.
This can be especially important for those with pre-existing conditions where they will want to have access to healthcare wherever they are in case of emergencies.
Unfortunately, it can be difficult to find an insurer willing to cover those with pre-existing conditions as some firms will not want to take on the risk of having to pay out large sums of money.
These existing medical conditions cover a range of different illnesses from cancer to heart disease and the definition can sometimes differ from insurer to insurer.
Eve Byrne, Macmillan Cancer Support’s head of campaigns, said: ‘This is sorely needed for customers desperate for a break but struggling to access affordable travel insurance.
‘While a directory of specialist firms is a step in the right direction, mandatory signposting will only benefit customers with pre-existing medical conditions if there is appropriate and affordable cover available to them.
‘The insurance market must change its approach to covering people with pre-existing conditions to ensure that people living with cancer can access a competitive range of options that appropriately meet their needs.’
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