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Travel insurance costs jump by as much as 2,000% for people with mental health problems

Joanna Faith
Written By:
Joanna Faith

Almost half of people with mental health problems do not disclose their illness to their travel insurer as premiums shoot up by as much as 2,000% if they do, new research reveals.

Through a mystery shopping exercise, The Money and Mental Health Policy Institute found that several insurers hiked premiums by over 400% for people who disclosed mental health problems that have been stable and effectively managed for a very long time, with some insurers still declining to offer cover.

But premiums soared by between 500% and 2,000% for those who disclosed more severe mental health problems, with most insurers either declining to offer cover at all or only offering cover that excluded mental health.

The charity has asked the Financial Conduct Authority (FCA) to formally review whether travel insurance pricing for this group complies with the Equality Act 2010.

A poll of 2,000 people, carried about by The Money and Mental Health Policy Institute, found that of those who had tried to buy travel insurance in the last five years, 45% of people with mental health problems never disclose their illness to their travel insurer, potentially invalidating any insurance they might take out. This is compared with 6% of people with physical health problems.

The research found that one in three people with mental health problems have travelled with no insurance to cover their mental health, either because they didn’t take out insurance as it was too expensive (13%) or because their mental health was excluded from the cover they could get (21%).

The charity’s director, Helen Undy, said: “Half of us will experience a mental health problem at some point in our lives, which could have a long-term impact on our access to insurance. If the mainstream travel insurance market doesn’t work for half of customers, then it’s really not working at all.”

In June, the FCA said it was working on plans to improve signposting to specialist insurers for people with pre-existing medical conditions. However, Undy said this only “addresses part of the problem”.

She added: “The way insurance companies calculate risk, and set their prices, is determined behind closed doors. Only the regulator has the data needed to check if it’s truly fair. Given the high prices that many people with mental health problems face, and the harm they experience as a result, it’s time the regulator took a closer look.”