Insurers refuse claims by holiday drinkers

Holidaymakers involved in accidents are having their insurance claims rejected because they had been drinking alcohol.

Tourists involved in accidents after drinking alcohol are having their insurance claims rejected

Over the past few years, the Financial Ombudsman Service (FOS) – which settles disputes when a financial services company and a customer disagree – has reversed a rising number of rejected travel insurance claims.

In 2013, more than 2,000 people felt their claim had been unfairly refused, of which 53% of complaints were upheld – up from 42% in 2011.

“The majority of travel insurance policies exclude cover for events that happen after excessive alcohol consumption – but that doesn’t mean holidaymakers will only be covered if they don’t drink at all,” the ombudsman said.

“As with all insurance cases, it is up to an insurer to show that an exclusion applies, not for their customer to show that it doesn’t.

“We expect a high standard of proof from insurers – proof that’s consistent with other evidence. We generally put more weight on evidence from blood tests and less on one-off remarks by a doctor at the time of any accident.”

It noted the frequency of cases where insurers had “jumped to conclusions” about what happened as a result of the claimant’s age or holiday resort.

Furthermore, it found in some cases terms describing alcohol consumption were not clearly defined in the policy, or unfairly applied by the insurer to reject claims.

Some customers had been accused of “alcohol abuse” or “alcoholism”, when medical records show they only consumed one or two alcoholic drinks.

Alcoholism

In an example given by the ombudsman, a tourist in Australia, “Mr J”, fell down a flight of stairs in a Sydney bar. He suffered a broken leg and head trauma and ws taken to hospital for treatment, including emergency surgery to remove a blood clot.

His insurance company refused to pay his medical bills because the doctor treating Mr J noted he “smelled of alcohol”. Mr J said he had only consumed two beers while out with friends and had drinks spilt on him, hence the smell of alcohol on him. The ombudsman ruled his actions did not constitute “alcohol abuse” and the insurance company was told to pay his claim with interest.

It added small print should make clear when alcohol would in fact make a claim invalid.