Saturday 23 September 2017

Don't fall victim to the small print of your insurance policy

MISSING MADGE: cover for gigs can be hit and miss
MISSING MADGE: cover for gigs can be hit and miss

Seven financial institutions could be hit with hefty fines after a probe by the Central Bank uncovered serious flaws in how the controversial insurance product, payment protection insurance (PPI), was sold to customers here.

The probe, which was published last week, found that many of those who bought PPI would never have been able to make a successful claim -- and so should never have been sold it in the first place.

PPI repays your loan, mortgage or credit card should you lose your job or fall ill. More than 340,000 PPI policies have been sold here over the past five years.

As the insurance can cost as much as 20 per cent of the monthly repayments on a loan, it is not cheap.

An insurance product does not have to be mis-sold to catch you out. The small print in many insurance policies could leave you out of pocket as it could entitle your insurer to easily turn down your claim.

If this happens, it doesn't necessarily mean you have been mis-sold a policy -- more likely, you've been caught out by the rules of your insurance policy. So what small print should you watch out for?

FLIGHT DELAYS

The next time you smile smugly because your flight is delayed but you expect a payout from your travel insurer, think again.

"An awful lot of claims for flight delays are rejected because the delay does not fit in with the travel insurer's definition of what a flight delay is," says John Geraghty, managing director of the online brokers, LAbrokers.ie.

"For example, if you've boarded your aircraft and are sitting on the plane when it is delayed, your insurer might not consider that a delay.

"Similarly, if you're on an aircraft and the flight is diverted to another airport, your insurer might not treat that as a delay. It's very hard to understand the terminology in travel insurance contracts."

MISSED CONCERTS

You've just paid €141 for a ticket to Madonna's gig in the Aviva stadium later this month. As that's more than you typically fork out for a gig, you also bought Mondial Assistance's missed event insurance to cover the cost of your ticket should you not be able to make it to the gig.

However, this insurance -- which is sold on Ticketmaster's web site -- only pays out in certain circumstances.

If you miss the gig because your train or public transport was delayed by a strike, you won't be covered if the strike was announced before you left home "or where you could have reasonably made other travel arrangements".

If you miss the gig because the aircraft on which you're booked to travel is withdrawn from service, you won't be covered.

And if you miss the gig because you're stuck in a traffic jam, you'll be covered -- but only if you're stuck in that jam for "more than three hours" and "there is no alternative route available".

Among the few reasons that Mondial will cover you are the death, serious illness or serious injury of you or a relative; a call to jury service; and if you are needed by the gardai following a burglary at your home.

When asked about concerns that it is hard to make a successful claim under its missed event insurance, a spokeswoman for Mondial said that the full terms and conditions of its insurance are available to customers to read before buying it.

"The terms and conditions state what is covered under the policy and what is not," said the spokeswoman. "If any customer feels that they have inadvertently bought the insurance when buying tickets online, they can contact Mondial Assistance who will issue them with a refund."

The spokeswoman added that customers have a 14-day cooling off period -- where they can change their mind about buying the cover and receive a full refund -- as long as the event for which the insurance has been bought is not over.

BREAK-INS

Not only could the locks on your front or back door let you down by failing to keep a burglar out, they could also be the reason your home insurer refuses to cough up.

Most home insurers only cover you if you have three-lever mortise deadlocks on all external wooden doors. Some even require five-lever mortise deadlocks.

If you have your home insurance with Aviva for example, your policy might not cover any loss or damage caused to your home during a break-in unless "all outside timber and French doors are protected by at least one three-lever mortise deadlock" and "all outside PVC doors have three or more mortise locking points".

When asked if Aviva would refuse to cover a customer if they only had a three-lever mortise deadlock on their front timber door -- but not on the back door, a spokesman for the company said: "As a general 'rule of thumb', no. The intent is always to pay legitimate claims.

"Clearly, however, the customer always has a duty of care to secure their property in a reasonable manner to prevent losses such as a theft or break-in. Home insurers are not in the business of turning down legitimate claims.

"But customers need to make themselves aware of their responsibilities in relation to the terms and conditions of their policy and, in particular, their duty to disclose all relevant material facts before they purchase or renew their home policy each year."

Be careful about opting for an alarm discount to reduce the cost of your home insurance. You need to meet certain conditions to get your alarm discount -- and if you don't, your insurer could refuse to cover you.

For example, you may have to get your alarm serviced every year by an approved alarm installer -- or have your alarm monitored by an alarm company.

"When you first got your home insurance, you might have signed up to an alarm monitoring service, and got an insurance discount based on that," says Jonathan Hehir, director of the insurance brokers, CFM Group.

"However, you might have cancelled that monitoring service since. If this is the case, you need to tell your insurer that you no longer have the monitoring service. Otherwise, it could refuse to cover you."

HORSE BOXES

Parking and reversing could be the least of your worries if you regularly drive with a horse box.

If your car is pulling a trailer, you are usually still covered under your car insurance policy if you're in a car accident. However, your insurer may not cover you if the horse box or trailer you were pulling is outside its definition of a trailer.

"Most insurers will only cover you if you're in a car accident if your trailer or horse box is single-axle," says Geraghty. "If, however, your horse box is double-axle, as a lot of horse boxes are, you may not be covered."

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