Findings of Examination of Travel Insurance Claims for Loss or Damage to Personal Items

  

2 September 2008

Findings of Examination of Travel Insurance Claims for Loss or Damage to Personal Items
-Insurers Urged to Make Policy Cover Clearer-

The Financial Regulator has completed an examination of travel insurance claims practices for loss or damage to personal items. This examination was undertaken as a result of concerns about the claims process experienced by consumers, in particular the requirement to produce receipts or other proof of purchase. 

The themed examination focused on compliance with Provision 1 to the General Principles in Chapter 1 and Provision 14 of the Claims Processing requirements in Chapter 5 of the Consumer Protection Code.

The main findings of this examination of travel insurance claims for loss or damage to personal items were as follows:

  • Most insurers indicate in their terms and conditions that receipts / proof of purchase may be required when a claim is made for loss or damage to personal items.
  •  A number of insurers identify in their terms and conditions that they may request receipts / proof of purchase for items that are valued over a certain amount, typically €100 or over per item.
  •  Most insurers will accept a claim even if a receipt / proof of purchase is not available.  However, insurers may request proof that a loss or damage has occurred and this could be by way of a police report etc.
  • A small number of insurers require receipts to be provided in all circumstances.
     

The Financial Regulator has informed insurers that it considers it unreasonable to expect travel insurance claimants to have to produce receipts or other proof of purchase in all cases, especially where the item being claimed for is of low value or not bought immediately prior to the claim being made.  The Financial Regulator has indicated to insurers that they should take a balanced and fair view before deciding whether or not to require claimants to produce receipts or other proof of purchase and has requested insurers to clearly identify in their terms and conditions the circumstances in which receipts / proof of purchase may be required.

In addition, the Financial Regulator has also requested insurers to give consideration to the development of a standalone information sheet that explains to consumers what they need to do in the event of incurring loss or damage to personal items.

Following the publication of these findings, Consumer Director of the Financial Regulator, Mary O’Dea said:  “The number of consumers buying travel insurance has increased greatly in recent years.  Feedback from consumers and the Office of the Financial Services Ombudsman show that too often, it is only when a consumer has to make a claim that they discover they may need receipts for goods or other proof of purchase. This may cause a difficulty for some consumers, especially where the item being claimed for is of low value or not bought immediately prior to a trip.

She added, “It is unreasonable to expect that consumers will have proof of purchase for all items.  We are urging travel insurers to make their policy conditions and claims process abundantly clear and at the same time we are suggesting to consumers that they look beyond the price and check what cover is offered under their travel insurance policy.”

Notes about this Press Release

Themed Inspections:
Themed inspections examine issues across a sector.  Where a specific compliance issue arises with an individual firm this is addressed directly with the firm and where appropriate, regulatory action may be taken.


About the Consumer Protection Code

The Code became fully operative on 1 July 2007. 

Copies of the Code can be downloaded from www.financialregulator.ie. General information on the code (for consumers) is available on www.itsyourmoney.ie or consumers can download a consumer guide ‘Consumer Protection Code – Your little red book’.

Provision 1 of the General Principles in Chapter 1 of the Consumer Protection Code
“A regulated entity to ensure that in all its dealings with customers and within the context of its authorisation it:

acts honestly, fairly and professionally in the best interests of its customers and the integrity of the market.”

Provision 14, Chapter 5 of the Consumer Protection Code
“A regulated entity must take reasonable steps to verify the validity of a claim before making a decision on its outcome”


About the Financial Regulator

The Financial Regulator was established on 1 May 2003.  It is the single regulator for most financial services in Ireland.  Its overall mandate is to: · Help consumers make informed decisions on their financial affairs in a safe and fair market; and· Foster sound, growing and solvent financial institutions which give consumers confidence that their deposits and investments are secure. The Financial Regulator’s consumer information resources are available by logging onto www.itsyourmoney.ie 

Source: Financial Regulator


See also:

Irish Insurance Federation (IIF)

August 2008:  Financial Regulator warns consumers to check the excess on home insurance policies

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August 2008: Nationwide Prepares Ground for Irish Operation

July 2008: Irish Government's health insurance risk scheme set aside

January 2008: Irish roads awash with 'written off' cars imported from UK


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