New research prompts calls for radical new reforms to the travel insurance industry after it found prices were up to four times more expensive for those with mental health issues
New research has revealed that nearly half (45%) of those with mental health issues never notify their travel insurer.
It is believed they don’t because premiums soar, their access to cover is limited or their cover excludes mental health problems as a result.
The Money and Mental Health Policy Institute (MMHP) is calling for radical reforms to the industry, as a result of these findings.
The charity is asking the Financial Conduct Authority (FCA) to formally review whether travel insurance pricing for this group complies with the Equality Act 2010.
Compared to this, only around one in twenty (6%) with physical health problems fail to disclose their illness.
A third of people with mental health problems have travelled with no insurance to cover their mental health, either because they didn’t take out insurance because it was too expensive (13%) or because their mental health was excluded from the cover they could get (21%).
Price hike for those who disclose
A mystery shopping exercise revealed that insurers would hike their premiums up by as much as 400% for those who chose to disclose their mental health issues, even if it has been managed for a long time.
Some insurers refused to provide cover altogether.
According to the mental health charity, Mind, a quarter of people in the UK (25%) will experience a mental health problem each year, whether it is depression or anxiety.
The MMHP’s director, Helen Undy, said: “Extremely high premiums and limited access to appropriate cover leave many people who have mental health problems struggling to get suitable travel insurance.
”We are pleased that the regulator has plans to improve signposting to specialist insurers, but this only addresses part of the problem. When a historic episode of depression leaves you unable to afford travel insurance, or you’re charged more for cover which states it won’t pay out for anything related to your mental health, it’s no wonder it feels unfair.
”Half of us will experience a mental health problem at some point in our lives, which could have a long-term impact on our access to insurance. If the mainstream travel insurance market doesn’t work for half of the customers, then it’s really not working at all.
“The way insurance companies calculate risk and set their prices, is determined behind closed doors. Only the regulator has the data needed to check if it’s truly fair. Given the high prices that many people with mental health problems face, and the harm they experience as a result, it’s time the regulator took a closer look.”
Calls for action
The Money and Mental Health Policy Institute is calling for:
- The FCA to formally review the fairness of travel insurance pricing for people with mental health problems, including asking firms to demonstrate that their pricing complies with the Equality Act 2010.
- Insurers to proactively alert customers with mental health problems to all relevant exclusion terms and other conditions so that they don’t have to search through the Ts and Cs to find out if their mental health will be covered.
- Insurers to improve their disclosure processes, so that people with mental health problems aren’t required to repeatedly disclose to call centre staff who have little specialist training.