New rules to help people with health issues get cheaper travel insurance
The Financial Conduct Authority (FCA) has introduced new measures to help consumers with pre-existing medical conditions have better access to more affordable travel insurance.
The rules require insurers to signpost consumers to a directory of specialist firms that will cover them if they have more serious health concerns.
Firms will be required to signpost customers when cover is declined or cancelled due to a pre-existing condition, when a pre-existing condition is excluded from cover, and when a premium will cost more due to a pre-existing condition.
Consumers with more serious pre-existing medical conditions could save around 40% on travel premiums by switching to a specialist provider, according to the FCA.
The government-backed Money and Pensions Service (MaPS) will create the online directory, which will list providers that specialise in covering consumers with more serious medical conditions.
Insurers will have to implement the new requirements by 5 November 2020.
Firms will also be required to include the details of the directory on their website within 30 days of becoming aware of the directory going live, which is expected to be by summer 2020.
The FCA estimates there are up to 14.1 million consumers with a pre-existing condition who look to purchase travel insurance each year. Of these consumers, approximately 0.7 per cent are declined cover, and 11 per cent purchased a policy with an exclusion for their condition.
Some consumers who are offered a policy may also benefit from shopping around, as they might find more affordable cover with a different provider.
‘Insurers must change their approach’
Eve Byrne, head of campaigns at Macmillan Cancer Support, said: “Today’s announcement is sorely needed for customers desperate for a break but struggling to access affordable travel insurance. This includes the thousands of people living with cancer who call our free support line each year for advice after being blindsided by sky-high premiums, often well into their recovery or with a doctor’s permission to travel.
“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.”
Kevin Hancock, chair of the Society of Insurance Broking, said: “All consumers should be able to access the right travel insurance for them. It is vital that consumers with pre-existing medical conditions find it simple and straight forward to find the right cover for their needs.
“It makes sense that firms offering retail travel insurance should point consumers they are unable to assist towards a directory of specialist providers who can provide cover to those with pre-existing medical conditions.”