The 25 most outrageous insurance policy exclusions ever

Insurance policies are designed by lawyers with one thing in mind - to boost the odds in favour of the insurance company so you stand as little chance as possible of having your claim paid.

The lawyers do this by hiding "get-out" clauses, otherwise called policy exclusions, in the small print of the insurance contract. Sometimes, insurers will take pity and pay a claim, despite being legally entitled to deny it. However, this is not always the case. Reading the small print of your policy or enlisting the services of an insurance broker when buying a policy is the only way to stay a step ahead of the lawyers.

Here, Times Money has compiled 25 of the more outrageous insurance exclusions to watch out for.

1. Ever thought of cricket as a "hazardous activity"? It is more than likely your travel insurer does. Most policies classify cricket as a dangerous activity and, as such, if you are injured whilst indulging in a few overs on your next holiday, you could learn the hard way that your medical bills aren't covered.

2. The great get-out clause in almost all insurance policies is alcohol. Few people realise that if you have consumed alcohol, your insurance company can void your claim whether it be for theft, damage or personal injury. Worse still, policies do not specify the the amount of alcohol that must be consumed and you could find yourself out of pocket after just one drink.

3. Fantasising about galloping through the mountains on horseback on your next overseas holiday? Unless you have made sure your policy allows for it, don't. Horse riding is another so-called "dangerous activity" as far as most insurers are concerned.

4. Insurance cover for delayed baggage is a useful feature of many travel insurance policies. However, few travellers realise that insurers tend to only compensate for baggage that is delayed on the way to the holiday destination. It may seem infuriating but if your bags disappear on an internal flight or on the way home they can't be claimed for.

5. Storm damage is one act of god that insurers will pay for - but don't expect compensation to extend to fences, gates, and hedges. Essentially, anything that is not nailed down - or considered part of the building - is excluded from cover.

6. Forget bicycle insurance if you haven't locked your pedals. Insurers demand "reasonable care" is taken before they will make a payment for stolen bicycles and non-motorised scooters. This means locking the bike - ensuring it is attached to something permanent - or storing it somewhere safe, such as inside a locked home or garage. The rule counts when claiming against a household insurance policy.

7. Don't bother asking your household insurance to pay for damage to your favourite dress damaged in the wash or by a dry cleaner. Damage caused during the cleaning process is generally excluded under home and contents insurance policies. This also applies to furniture restoration and upholstery. One broker's advice was to try suing the dry cleaner instead.

8. When working from home, be aware that your standard household policy may not cover you for theft or accidents which occur there. If setting up a cottage industry from your garage, make sure you talk to your insurer or broker as it is likely you will need an extension to your household policy.

9. Some insurers may refuse to pay out if you have filled your car with the wrong type of fuel. It may sound odd, but insurers consider so-called misfuelling to be a form of "reckless" behaviour when it comes to car damage. Steve Foulsham, of the British Insurance Broker's Association (BIBA) says drivers who quickly park their car and phone their insurer or breakdown company rather than driving off have a better chance of receiving compensation.

10. Most drivers know they must notify their insurer when they have an accident. But did you know that if you are a named driver on another person's policy, the policyholder needs to also notify their insurer when you have an accident? This applies even if the named drive has an accident in another car. Central claims databases record all claims, and insurers can refuse to pay a claim if one of the named drivers on the policy fails to notify the insurer after an accident.

11. When travel insurance policies ask about pre-existing medical conditions most people tend to think of serious and life-threatening illnesses such as heart attacks or strokes. But take a closer look at the insurance policy small print and you will see that most policies fail to define what is a pre-existing medical condition. In fact, if you have ever been diagnosed with high-blood pressure, or have undertaken major surgery you must tell the insurer or risk voiding your policy.

12. Do you know what kind of window and door locks you have at your home? Take a closer look. Most home insurance polices have a clause to say that you should have window and door locks approved by the British Standards Institute (BSI). Many people unfortunate enough to be burgled have subsequently learned their locks are not to standard and they are ineligible to claim.

13. Many people assume their iPod, wallet and designer sunglasses are covered by insurance when they're out and about. But take a closer look at your policy. It is usually the case that valuables outside the home require a personal possessions extension in order to be covered by regular home and contents insurance policies.

14. Most insurers impose a limit on the value of collections they will insure under regular home and contents insurance. For example, valuable stamp collections can be worth hundreds of thousands of pounds and are likely to need separate insurance. One insurer recalls an unsuccessful claim under household contents insurance for the theft of a miniature whisky bottle collection, some of which were valued at £5000 each, that was not separately insured.

15. Insurers will reimburse for the cost of one lost earring, but will not replace the pair. This is because most policies contain a pairs and sets clause which means you are only entitled to replace lost and damaged item and not its pair or set. A more annoying example of this encountered by flood victims occurs where insurance companies agree to compensate for a bottom drawer which has been damaged by water, but then quibble over replacing the entire set.

16. Planning to go away for more than 30 days? Your home and contents insurance may not be valid. Check your policy to make sure you are covered when your home is unoccupied for long periods.

17. Dogs may be man's best friend but they are given short shrift by insurers. Damage caused by pets is excluded under normal home and contents insurance. According to brokers, insurers receive an astounding number of claims relating to hamsters chewing up the carpet.

18. The Y2K threat may be well and truly over now that we are seven years into the new millennium but the insurance companies aren't taking any chances. Date related breakdown - formerly termed the "millennium clause" - remains an exclusion for the cover of electronic equipment including computer hardware and software. But this is not merely an antiquated precaution. Apparently the threat of data related breakdown remains real thanks to palindromic dates (such as 21/11/12) while the year 2010 may yet pose a problem.

19. Insurers usually refuse to cover the theft of vehicle if you have been careless enough to lock your keys in the car.

20. Those who prefer to travel light may find it tempting to store valuables such as cameras in the cargo hold with the bulk of their luggage. But be warned - travel policies may refuse to pay for theft or damage to valuables not kept with you. Be warned: this also applies where valuables are left in a car on a cross Channel ferry.

21. It can be enormously expensive to fix but damage to your home caused by insects and vermin, for example, termites, is historically excluded from buildings insurance.

22. Fancy a sojourn in the Middle East? Thinking of trekking in Afghanistan? Don't expect your travel insurance policy to cover you if war breaks out. Insurers generally steer clear of covering war and terrorism.

23. Insurers will only pay for the cost of removing fallen trees according to home insurance policies if property is damaged when the tree falls.

24. Damage caused to a home after a boisterous party generally won't be reimbursed by your insurer. The same applies to items that are stolen from your home during the party. As a rule of thumb, insurers refuse to pay out if you have had any control whatsoever over the events which lead to the claim.

25. Payment protection is arguably the most exclusion-riddled of all forms of insurance. PPI, which is sold with loans, credit cards and mortgages, covers repayments if people are unable to work due to an accident, illness, or termination of employment. However, most PPI policies do not pay out for the first 30 days. Conditions such as stress and back pain tend not to be included while the self-employed, students and housewives are also not usually covered. The deliberate sale of PPI policies to those unable to claim for them has been the source of outrage from consumer groups due to the wide range of exclusions, and has been the subject of investigation by the Financial Services Authority and the Competition Commission that has resulted in companies being fined for inappropriate selling.

List compiled by Elizabeth Colman.

Image courtesy of Timsnell

With thanks to the British Insurance Brokers Association (BIBA) and Moneysupermarket.com

Comments

[Nigel]

A couple of years ago, our home was burgled. Amongst the usual type of stuff stolen - stereo, DVD player, CDs, jewellery etc. - was £18.50 in cash.

The money was some petty-cash that belonged to the Brownie pack where my wife was a leader. The loss-adjuster seemed exceptionally interested in establishing this fact when she visited - maybe because we were so sure exactly how much cash was missing, even though it was a relatively small amount.

Our insurer settled promptly in a sum of >£4,000 but not before deducting £18.50 from the claim. The cash was not our property so therefore not insured.

This kind of penny-pinching just gives insurers a bad name.

[Martin Bentley]

Great example of how stupid the British are when it comes to simple economics. Of course the insurers are going to try and make sure they rule out a number of claims.

The "generous" insurance company is the one that doesn't survive.

The best you can expect from a fair/reasonably priced insurance policy is the majority of your loss to be covered. Not all.

Britain is increasingly a nation of whiny bores who want something for nothing. Including someone who thinks being penalized 20 quid when they got nearly 4000 of their stolen property back is "penny pinching"?

Get a life! Without it you won't have a life to insure.

[Michael Fortescue]

There is an outrageous, but universal except from (very expensive) specialist underwriters, exclusion in UK travel policies. Nor do any that I have discovered enable the exclusion to be overcome by a 'hazardous activities' supplement (although I would refute the suggestion that the activity is truly hazardous). The perception of the hazard seems to derive from the accident statistics of a very distant era.

I can emerge jet-lagged from a flight to the US or Canada, present my UK driving licence, and drive away in almost any sort of hire car for which I am prepared to pay (even a high-performance one the like of which I have never driven before), to drive on unfamilar roads with unfamiliar traffic laws, potentially for hours to my first destination. None of this will invalidate a standard travel insurance policy.

But I am a UK-licenced private pilot, with civil and military flying qualifications, and have previously held both US and Canadian licences. I have been flying accident-free for almost 40 years, and much of that in standard US-built light aircraft that are identical in performance and instrumentation when operated in the UK as in North America. The basic essentials of the 'rules of the air' are also much the same all over the world. Even for a local and much more so for a foreigner, to rent a self-fly light aircraft in the US or Canada will require check flights from the renting organisation's instructor, and a thorough ground brief on local laws and procedures. And all that has to follow the elaborate (security-related) paperwork required for a foreign pilot in each country; in the US, these include an expensive procedure by which the current validity of the foreigner's licence credentials have to be verified before entry to the US; this may require an Embassy interview.

But the standard UK travel policy excludes all risks associated with flying except as fare-paying passenger in a recognised commercial carrier. This cannot be actuarially justified, as the very presence of this exclusion means that very few UK pilots undertake such private flying abroad, which means that the insurance companies' sample size of claims-to-policies must be tiny. Furthermore, US private pilots can easily find overseas travel policies without this exclusion, so their insurance companies obviously do not expect private flying in other countries intolerably more dangerous than overseas travel generally.

And there are many other standard holiday destinations where local self-fly hire is an attractive proposition for the UK pilot: the Caribbaean, Southern Africa, Australia, New Zealand.

[Nicholas Wood]

Insurance. Don’t you mean Legalised Fraud?
Nicholas Wood.
Wakefield

[David Barber]

Another one to watch out for - Missed Departure Cover. It's not what it seems to a reasonable person : my claim was refuted by Barclaycard Travel Insurance when I missed a flight to Venice for Valentines weekend due to Standsted Express breaking down.I thought it would be as clear cut as they come, but turns out the small print specifies that they only cover you for "additional expenses in still getting to your destination after a missed departure". So if you don't get there at all, no compensation! And.. don't try claim the expense of the same trip the next weekend.. the "additional costs of travel" must be on the SAME day. Very very annoying to be totally misled like that.

[Niall O'Shea]

I got to about the 10th 'outrageous!' exclusion and I have to say that all of them this far were either sensible or could be reasonably justified. I agree with another poster that too many people have daft expectations that just because they've paid a premium means they should be insulated against the slightest or most irrelevant mishap and act like the insurer has torn up the UN Declaration on Human Rights when they don't get their way.

Yes, a lot of insurance companies have perfected slippery shoulder routine. I happen to work for a major insurer and although I don't work in insurance per se I know people who deal with the most fantastical claims imaginable on a daily basis. Taking the p*ss is practised on both sides of the fence.

It pays to investigate the reputations of companies among consumers for pay-out ratios. And the cheapest quote is often the cheapest for a REASON.

[Tom]

A few years ago I was returning to UK from Nice. However at the airport I was informed that AB the airline had gone bust. No problem I thought I've paid my yearly premium to Barclaycard for travel insurance I'll buy another ticket and claim it back. Except that when I tried to claim it back they directed me to the small print of the policy which excludes their liability in case of an airline going bust. It's the lawyers old favourite: what we give with contract we take away with the small print.

[Mark]

Don't buy insurance uness you really have to.

Get a Free EU medical card at http://www.dh.gov.uk/en/Policyandguidance/Healthadvicefortravellers/index.htm

Run an older car on third party insurance. Don't bother with contents insuarnce and sell sick pets to your local take away,

[Ruth]

I'm dissapointed with the Times for publishing this article with such a negative slant. The tone is more akin to something I'd expect to read in one of the lessor papers. Where's the unbias reporting, representing both sides and all the facts?

Yes, tell consumers important info that they should know, as we often don't have time or the inclination to read our policy documents, but don't make out it's some rip-off scam. As much as everyone wants everything now now now; life is sometimes a bit more complicated than that!

[John]

Ruth, it is a rip-off scam !

Having spent months trying to claim for flood damage with little positive result, I know.

[David]

This piece is a bit of a curates egg.

Insurers have to protect themselves against fraud and the small print, if you read between the lines, confirms what they will pay for. Caveat emptor. If you aren't sure a particular policy will do what you want FIND OUT. Don't buy online, use a broker, call the insurer to get a full copy of the policy before you buy; make yourself a thorough nuisance if you have to but don't whinge afterwards. All policies are priced according to the risk they accept and the "beligenerence" of their claims department.

Some of the reported issues and even some of the negative posts might actually be satisfied by a claim against another party viz dry cleaning. Whay should your insurer pay when the damage weas caused by another party? As for AB airline, forget the travel insurance, claim against your credit card issuer who have an undisputable liability here. FACT Most people buy insurance or have consumer protections and simply don't know what they will do for them let alone the things they won't.

[trish]

Mark, Im with you 100%. Wise words indeed.

[Jonathan Wilton, Singapore]

This looks more like an advertisement for BIBA than an article on insurance scams.
Not that there's anything wrong with that. Anyone who doesn't use a broker is asking for trouble.
And before you ask, yes of course I am. Furthermore I buy as much insurance as I can afford from the most solid insurers I know in each field, I specify the cover I want, I pay the premium for it and if I have a loss, I make very sure that I get paid out. I have never had a problem.

[Threaded]

Insurance is a total scam. I lived in a quite religious area of the Netherlands and no one had car insurance as you'd see it, it just wasn't necessary, as the local church provided cover. Essentially everyone in the congregation put into a pot, or took out, as necessary.

Now the government, under pressure from the insurance companies, has brought in a law saying everyone has to have insurance from one of these outfits. The costs are more than 10 times what they were previously! Also people are having major problems getting claims processed and having to pay lawyers to get their entitlement.

Dunno how you'd term it but to me that is just legalised fraud.

[Paul Roberts]

Insurance companies will insure you against anything except a claim.

[Graham]

It may be a bore but read the small print - it's not THAT difficult and insurance companies (the better ones anyway) do in fact try to make it easier. If in doubt, ask....

[Eyre Shaw]

Ref the first posting by Nigel I had our hotwater geyser develop a leak which damaged the ceiling and trim that had to be replaced. When it came to the paint work I decided to do it myself. I therefore bought the required paint plus a cheap "throwaway" tray and roller. I sumbitted the slips as part of the larger claim but was disappointed when I discovered that the cost of the tray and roller, amounting to no more than a pound or two had been deducted. Forget about the fact that I did the job myself at no cost to the insurance company. One could have bought a hundred paint trays and roller sets for the cost that a professional painter would have charged had I decided to go that route which was my perogative. But the insurance company consciously chose to look beyond that. I don't want to read too much into this trivial incident other than to suggest that it is all part of a mindset.

[Silver Shred]

Anyone who has ever sat in an A&E and seen the number of punters coming in for stitches to eye injuries after over-enthusiastic beach cricket sessions wouldn't doubt that the world's most boring game is also inherently dangerous. I'm with the insurers on that one.

You clearly invented the number before you had the copy because a number of these revelations are less than earth-shattering

[Liam]

Insurance is for the weak; people who can't struggle through life without a consolation prize. Save your money and spend it on proper locks and a baseball bat. If we all took responsibility for our own lives, from cradle to grave, then insurance brokers would be on the dole, where they deserve to be.

[Kieran Bhamra]

I had all my 'important mobile' posessions stolen recently, watch, mobile phone, keys, wallet (cash, cards) etc
I found I could claim on the house insurance even though they were stolen at a private leisure facility. Happy at this I realised that this was one of those times when I would have to go against the grain, of which I mean to say that, to get what I deserved as an honest victim, I would have to decieve, much the same as a gentleman not too long ago on Radio 4 had to do. He found a burgalar in his home, hit him but told the police he was hit first, otherwise he could have been arrested for actual bodily harm on his burgalar!! Anyhow.... I exagerated the claim, my £20 cash was £40 my £100 watch was £200 etc. When the insurance paid out, I was given (give or take) around 50-60% of the value of the items stolen. Hence was financial around even.
This shouldnt be how insurance works. But sadly it is.

[Nick James]

Re the pets exclusion: when my household insurance recently refused to pay out for damage caused by someone else's cat that invaded our house whilst we were on holiday, I asked whether they would have covered the damage if it had been done by a wild animal like a squirrel. "That would depend," replied the service centre worker, "on whether it was a red squirrel or a grey squirrel."

(Grey squirrels are vermin, and therefore excluded, red squirrels are not - although how you'd prove its colour would be an interesting problem)

[Cliff]

Also be careful about your mode of travel on holiday - not just when you're there but also how you travel there. A friend was left wth a large bill for repatiating her husband's body when he was killed on a motorcycle touring holiday in France. He'd taken out all the insurance he though he needed - travel, breakdown, medical. The mistake he made was to ride a motorcycle on holiday 'for pleasure' even though it was his usual mode of transport both in the UK and elsewhere. OK, it was in the smallprint but everyone who's looked at it agrees it implies situations such as hiring a bike at a resort. It's going to court.

[K Green]

does Mr Bhamra realise that A - if he had not inflated his claim he would still have been paid the same amount-ie the value of the stolen goods. and B - he has commited a criminal offence-fraud-and has become one of the reasons why insurers are charging more, and viewing claimants with suspicion?

Our house got robbed a few years ago and my Mum's jewellery was taken which was of massive sentimental value and worth quite a few thousand pounds. My Mum is one of the most honest people you could hope to meet and so she claimed the correct amount. They then offered a much lower figure as they assume everyone claims more. At the time I told my Mum to claim more. It is a sad fact but you have to be lie to get a result as everyone does and you get punished for being honest.

[Keith]

Having ended up with severe internal bleeding in my arm after a game of cricket I can confirm it is a dangerous sport! My only bad experience of insurance has been with my mobile, they refused to pay out because I'd spent some time looking for it before reporting it stolen.

[Kieran Bhamra]

I do realise I have commited fraud and am very unhappy with myself for this run of events, however I felt my decision was made for me. If I had a car crash, I would claim for the damage to my car, a lot more people would claim 'sore back' and recieve 'whip-cash' also. I am an honest citizen (up until that point of claiming!!) and feel too many people cheat the system, but mainly the insurers themselves cheat us!! I was once told 'an insurance company decieves an legally holds you to ransom your whole life, you get one chance to get back at them' I certainly wouldnt have recieved the same amount, an honest fair amount which was around the value of replacing the stolen items (after replacing the items like for like, I had a £2 deficit, the insurer paid me a percentage of the items stolen which, if memory serves, was for "depreciation" of the items.
I am unhappy that my actions may cause premiums of everone else to go up in some small way, and that I have decieved, however I certainly wont lose sleep over £400 from an insurer who makes hundreds of millions in profit.

[Kieran Bhamra]

....... i would also like to add, in regard to K Greens response to my post, why is fraud against insurance companies illegal yet their 'protection rackets' arent????

[Philip Cakebread]

Re No 18 - The Y2K scare. I believe Microsoft count their dates from Jan 1st 1900. However they seem to think that 1900 was a leap year so doubtful dates may be a day out!

[richard]

There is only one thing to remember about insurance, and that is that insurance companies exist to make money for their shareholders. If you bear that in mind, most of the nasties quoted above can be explained, if not excused.

[Brian Gee]

One point noting is not to be too greedy.

Most policies cover £100,000 contents, but who claims this amount? After a stock take and valuation on replacing all my worldly goods in my flat - at the most generous estimate it came to a third of this figure!! The excess I also adjusted to a better figure. The Result was a dramatic reduction in my policy of well over 60%.

So take these points into account when taking out contents insurance is my advice.

[Todd The Travel Insurance Expert]

This site will provide you a complete guide lines on insurance policy. It is very essential to know about it. It will also give you an idea when you should claim for under what circumstances.
There are numerous stories of people who were ill prepared to meet the trials in this life. These people found themselves in dire financial straits or even through their deaths, left their families destitute. Call an insurance broker and ask to talk to him or her about this sort of protection so that preparation can be made for the future. Don't wait until it is too late to do any preparation. Check out combined insurance policies today and be prepared for whatever the future may bring.Many people do not realize that they may already be covered for certain elements by their existing insurance polices

[Patrick The Holiday Insurance Expert]

When I went through the article I noticed one most important thing that insurance is essential for all. While we go on holiday tour we just ignor about the bad happens but suddenly if accident occur, it brings a lot of damages. Total life can destroy. But by having an insurance on life we can safe our life to some extent.