Travel insurance market still not working for customers with medical conditions, Which? research finds

Holidaymakers with pre-existing conditions continue to pay over the odds or face being priced out of travelling altogether, despite recent measures to address the problem, Which? research has found. 

In our recent survey of 4,009 buyers of travel insurance, 61% said they have a pre-existing medical condition or a history of one. Over a third (36%) reported recent difficulties getting affordable cover because of their condition, with 7% of these people deciding to travel without insurance because premiums were prohibitively expensive. 

Here we explain how your medical history can affect the premium you're offered – and how to improve your chances of finding suitable cover at a decent price. 

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The cost of pre-existing conditions

In the past two years, the median amount paid for annual policies by customers with a pre-existing condition was £150 – 56% higher than those without (£96). Those who bought single-trip policies paid 88% more (£75 vs £40).

At an individual level, the differences can be much larger, depending on the nature of the medical condition as well as other factors such as age. 

One customer in our survey, who has diabetes, told us they'd found they were paying roughly four times what they'd be charged if they didn't declare their condition – describing it as 'so unfair', and that 'it makes you less inclined to bother taking holidays.'

In February, research by the Money and Mental Health Policy Institute found that a customer declaring severe bipolar disorder could expect to pay over 10 times more, on average, than an identical customer without the condition – and receive quotes from fewer than half the firms.

Issues when trying to claim

Steep prices aren't the only problem. Our survey also found pre-existing medical conditions to be a common cause of claims problems. 

Some 804 customers (with and without medical conditions) told us they'd made a claim in the past two years – over a third of which had been rejected, disputed or only partially paid. 

Policy exclusions were the most common cause of claims disappointment – the reason that 32% were quibbled or denied, closely followed by pre-existing conditions (27%). This is particularly concerning, as it suggests many customers are learning about inadequacies in their policies when they try to claim – information that is supposed to be made clear when they buy the cover.

• Find out more: How to claim on your travel insurance

How 'signposting' is supposed to help

The low visibility of specialist insurers with the expertise and willingness to cover those with certain medical conditions at fair prices is a long-running problem. 

Specialist firms often don't appear on comparison websites, meaning many customers miss them and are left with an incomplete picture of the cover and prices available to them. At worst, this can mean some pay much more than they need to or assume they can't get cover at all.

To tackle this, in 2020 the Financial Conduct Authority (FCA) established a directory of specialist insurers, which you can find on the Moneyhelper website. The British Insurance Brokers' Association has created a similar directory, which the FCA endorses. 

In early 2021, new rules were introduced meaning that travel insurers must make customers aware of one of the directories if covering their condition(s) adds more than £100 to the premium. 

Limited success

The FCA is carrying out a review of how well these measures have worked, which it expects to finish in October.

Our research suggests that signposting isn't as effective as it needs to be. Just 48% of those we surveyed who'd experienced difficulty buying insurance because of medical conditions said they had tried a directory. And customers who had used directories were more likely to have learned about them by chance – or from someone they know – than from an insurer. 

The good news was more than nine in 10 who had used one said they'd got better prices from firms listed in the directories than from other companies. But it's clear that not enough customers know to try them in the first place.

'If you have any doubts... speak to your insurer'

We shared our findings with the Association of British Insurers. It responded: 'Our members work hard to ensure competitively priced products are available to as many people as possible. As part of the long-standing signposting agreement, if an insurer is unable to offer you cover, they automatically refer you to an alternative provider who can help. This process is currently under review and we are working closely with the FCA to understand how it is working and any improvements that could be made.

'Disclosing pre-existing medical conditions is key to making sure your policy meets your needs, so it is vital that all questions are answered fully and honestly. If you have any doubts about what you need to declare, you should speak to your insurer. We and our members understand that simple, straightforward communication is essential. We know that more needs to be done to ensure it is always as clear as possible, which is why we have partnered with organisations such as Fairer Finance and Plain Numbers to make sure all documents and numbers are presented in a way that is easy to understand.'

How to find the right cover

Follow these tips to increase your chances of finding a policy that meets your needs and doesn't cost the earth:

• Try the directories: In our survey, most people who used the BIBA and MoneyHelper Directories said they found better prices from firms listed on them than they did elsewhere, and they also usually found them helpful. This didn't happen 100% of the time, but our research shows they're well worth checking – especially if you've not been having luck with mainstream insurers.
• Check the cover: A great price isn't the full story. Carefully read the policy and what cover it will provide, as you may find you are paying for things you don't need or aren't covered for everything you want. Check the policy wording to see which items on your cover wishlist are explicitly mentioned or excluded. Contact the insurer if anything appears unclear.
• Declare medical conditions you want covered: If you haven't told your insurer specifically about your medical condition, then it probably isn't covered. In some cases, it's necessary to contact the insurer to arrange for conditions to be added. This can be the case, for example, with policies added to flights or included with bank accounts. If you're in any doubt about the insurer's position, contact it.
• Push back if your insurer gets a claim decision wrong: Some 43% of customers whose claims weren't fully paid weren't given a reason why. If your insurer refuses to pay out, you're entitled to a clear explanation. If this isn't satisfactory, make a complaint in writing. Some 62% of complaints made to insurers are upheld in the customer's favour, according to FCA data.

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