Your ticket to ride

In the first part of this feature (C-Zone 9 March ) we looked at the main categories of standard cover, such as cancellation, personal accident, medical expenses, loss of baggage, delays and missed departures. Most travel policies will also include cover for specific risks, such as the loss of a passport.

Should travellers find they have lost their passport while abroad, they can normally claim expenses up to a limit of about £200 or £300 to cover additional travel and accommodation costs incurred in the process of obtaining a replacement.

One eventuality less frequently encountered by travellers - thankfully - is that of hijack. If a policyholder is prevented from reaching their scheduled destination because of a hijacking affecting their intended means of transportation, they would normally be able to make a claim on their travel insurance policy for delays caused.

A typical payment would be £100 for each 24-hour period of delay up to an overall limit of about £1,000.

Tour operator collapse
Many travel insurance policies also include cover against the collapse of a tour operator. If a travel firm goes out of business, the policyholder may be faced with the need to re-book the holiday with another company or they may face extra expenses in returning home from abroad.

Provided the original tour operator is licensed by the Association of British Travel Agents or a similar professional body, most travel policies will provide cover against this risk. Where not included in the standard policy, this cover is generally available as a policy extension.

Looking beyond standard policy features to extensions, one important aspect of additional protection commonly available is legal expenses cover. This would typically cover the policyholder or their relatives for legal costs, up to a maximum of about £25,000, incurred in pursuit of a claim against a third party believed to be responsible for bodily injury or death to the policyholder while abroad, so long as the insurer believes there is a reasonable prospect of success.

Legal expenses extensions will not normally apply to claims against carriers, travel agents, tour operators, insurers, other individuals with whom the policyholder is travelling or who are insured under the same policy. Legal expenses cover often includes access to a 24-hour legal advice helpline.

Your obligations
Turning now to consider conditions and exclusions commonly applying to travel insurance policies, policyholders are normally required to fulfil a number of basic obligations for cover to apply.

A key condition of most travel policies is that policyholders must disclose any medical condition or set of circumstances that may have given rise to a claim.

It is very important for insurance advisers to underline this obligation clearly to prospective policyholders. Failure to disclose a medical condition suffered by any traveller that might affect their holiday or travel arrangements could result in a policyholder's claim being denied and potentially leave them stranded overseas.

Other standard conditions include a duty to exercise reasonable care to prevent accident, injury, loss or damage, and an obligation to advise the insurer as soon as practicable of any occurrence that could give rise to a claim.

Exclusions applying to travel insurance policies would normally include: loss of luggage due to official confiscation; loss or theft of property left unattended in a public place or not reported to the local police or airline within a set period (for example, 24 hours); and loss or theft of unattended money (except from hotel security, safety deposit box or safe).

Death or bodily injury claims would normally be excluded where this results from non-essential medical treatment or surgery; from injury or sickness resulting from HIV or AIDS; alcoholism or drug abuse; from participation in hazardous sports, pursuits or activities; from suicide or self-inflicted harm; from pregnancy beyond a specified term (for example, 28 weeks); from childbirth; or from insanity.

Expenses resulting from exposure to tropical diseases where the policyholder has not received recommended inoculations will also normally be excluded.

Policy overlap
Where there is an overlap in policy cover between an insured person's travel and household contents policies (such as lost baggage) the principle of contribution dictates that the policyholder cannot claim under both policies for the same loss except where they have exhausted the extent of cover provided by one of the policies and need to claim the balance under the remaining policy.

When one insurer has paid out they may seek a contribution from any insurer who has issued a policy providing overlapping cover.

The calculations determining the proportion of the loss for which each insurer is responsible can be quite complex, but are normally performed on an "independent liability" basis, governed by the limits of liability under the policies related to the total cost of settlement - meaning that that the policy liability of each insurer is considered independently of the other insurer's liability before calculating their respective contributions.

It is normally wise for advisers to check first what provisions are in place under particular policies.

Winter sports
Finally, winter sports is a form of cover extension commonly requested. Extended protection provided for winter sports would typically include cover for ski lessons and ski lift passes where the policyholder is prevented from attendance for a period of 48 hours or more (normally subject to medical certification).

A daily benefit of about £20 may be payable if pistes are closed due to lack of snow during a period in which adequate snow cover would normally be anticipated.

Travel delays due to avalanches would also normally be covered beyond the first 12 hours (except where this duplicates cover under another section of the policy).

Ski hire charges may also be included in the event that the policyholder's own equipment is lost, delayed in transit or damaged beyond repair. IT

' Ian Jerrum is managing director of Searchlight Solutions. This feature is based on materials available on Searchlight's market leading e-learning system, Tick.

Test yourself on travel insurance
Q1 What would be a typical amount payable for each 24 hours delay resulting from an incident of hijack?

Q2 Name three standard conditions applying to travel insurance policies

Q3 Name three circumstances under which claims for death or injury might commonly be excluded

Q4 The term "independent liability" describes the basis on which what is calculated?

Q5 Name three types of cover specific to winter sports travel policies expenses in the event of a missed connection

A1 £100. A2 a) Duty to disclose relevant medical conditions; b) exercise of reasonable care;

c) obligation to advise insurer of a potential claim within a reasonable period of time. A3 Where it results from any three of the following: a) non-essential medical treatment or surgery; b) HIV or AIDS; c) alcoholism; d) drug abuse; e) participation in hazardous activities; f) suicide or self-inflicted harm; g) pregnancy beyond a specified term (eg 28 weeks); h) childbirth; i) insanity.

A4 Insurers' respective contributions where policy cover overlaps between travel and home contents policies. A5 Any three from: a) ski lesson; b) ski lift passes; c) closure of pistes; d) ski hire charges; e) travel delays due to avalanche