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Those most at risk are the holidaymakers that purchased travel insurance offered as part of a ‘packaged’ bank account. What seems like a good deal costing between £5 and £25 a month, these accounts provide cover for more than just holidays, be it breakdown cover or mobile phone insurance – however, they are not to be trusted.
Over the past few years because the number of customers actually making any use of their ‘benefits’ is very little and not all people are even eligible under the terms of cover. Three years ago, banks were even told to send a letter to customers to warn them if they no longer qualified for insurance provided with their account.
There was a recent case of a gentleman realising he was no longer covered by his insurance as he was deemed ‘too old’ and exceeded the policy’s age limit. He only realised this after his return from his trip abroad to find that he had in fact been uninsured.
According to the Financial Ombudsman Service, packaged bank accounts are the second most complained about financial product after PPI.
Ombudsman spokesman Martyn James said, ‘The biggest risk for people with packaged bank account travel insurance is a change of circumstance that might affect their policy.’
Unlike standalone cover, where people are given the opportunity to renew every year, therefore can make suitable changes according to their change in circumstance, packaged account travel insurance simply rolls on from one year to the next. This leaves people vulnerable as they are unlikely to check whether the policy is still appropriate for them.
If you’re not taking advantage of everything offered as part of a packaged bank account, then you are most likely paying more than necessary! We can search for a deal that best suits your needs – according to any medical conditions you have, age and level of cover required.