Insurance and residence abroad

Author: John Canning

Table of contents

• Why take out insurance?
• 10 steps for taking out insurance for residence abroad
• 5 hints to ensure value for money
• Disclosure of disability and illnesses
• Discrimination
• Bibliography
• Related links

Why take out insurance?

Insurance can provide security and peace of mind. Most people prefer certainty to risk (Clarke 1997: 2) and an insurance policy involves paying a fixed sum of money instead of paying nothing and risking paying a larger (and unknown) sum in the unlikely event of illness, injury, loss of possessions, legal costs etc.

Insurance also avoids the stress of pursuing damages through a UK or non-UK legal system (Clarke 1997: 3).

10 steps for taking out insurance for residence abroad

1. Firstly, examine your institution's own insurance policy. Your institution will have an insurance policy as part of its capacity as an employer. This policy may cover students for residence abroad, but it may only cover staff trips on university business.
2. Your institution's policy may be sufficient, but there are strong chances that it will not be. For example, the University of Southampton's policy covers only up to 7 days for 'personal travel'. Time spent by students away from their institution or workplace, may exceed this time. In this case additional cover will be required.
3. All students going to EU countries should have an E128 or a European Health Card (which technically replaced the E128 from 1 June 2004, but the UK government has decided to phase this in later in 2004). NB the better-known E111 is for holidays only. The E128 or European Health Card entitles an EEA citizen to free treatment when on work or study in another EEA country; failure to produce an E128 may mean that treatment must be paid for then the cost reclaimed on return from the UK. NB: The E128 concerns health costs and does not cover personal effects, cancellation, curtailment of trip etc. so it is not an alternative to insurance.
4. You need to be aware of what the policy covers. A basic policy may not cover injuries or illness resulting from participating in hazardous activities. Winter sports cover usually requires a higher level of cover and 'hazardous' activities may include all contact sports such as football.
5. Check the geographical extent of the policy. Many insurers offer different rates for European and Worldwide travel. Special policies will be required to countries that the FCO advises against travel to.
6. Disabilities or existing conditions must be declared to the insurance company in advance and may increase the premium. Insurance companies may not pay out for illness or injury resulting from or relating to the disability (see disclosure below).
7. Make sure that the levels insured for personal belongings, medical treatments etc. are sufficient.
8. Always have access to the policy during the time spent abroad. In the event of theft, the insurance company may require a police report before any payout is made. However, in the case of medical treatment showing the insurance documents will not be recognised a guarantee of payment (though an E128 or European Health Card should be). The insurance company should be contacted as soon as possible if a claim will be made.
9. For students on work placements (including assistantships) try to find out what the employer's insurance covers.
   • There may be problems where the placement provider does not have conventional insurance. This may well be the case abroad, where many placements are with governmental and quasi-governmental bodies which do not insure. It is recommended that the same placement agreement wordings be offered as for UK placements. If these are not acceptable, the Member's public liability cover can be extended to include the liability of the student... On some occasions this member may be asked to provide an indemnity to the placement provider and such requests should be referred to UMAL.
   • In many overseas countries, employer's liability insurance is unknown and injuries at work are compensated automatically under a worker's compensation scheme. Students on placement may not qualify for inclusion in such schemes. This should be investigated before the placement is agreed, and, if no cover can be granted, then adequate personal accident insurance should be arranged for the student for the duration of the placement. Higher Education Mutual Association (UMAL)
10. When getting quotes make sure that the insurance company understands exactly what length and type of cover is needed. An annual (multi-trip) policy will not be sufficient as these policies only cover travel 30-60 days in a year.

5 hints to ensure value for money

1. Find out what your institution already covers by contacting the person in charge of Health and Safety (always ask for the policy documents and ask specially about residence abroad if in doubt).
2. Policies sold by travel agents alongside airline tickets, hotels etc. are unlikely to be competitive on price in comparison with specialist travel insurance companies. Additionally they may be worthless to students with disabilities or some illnesses as they are a standard product.
3. Although travel insurance can be purchased online, this is not advisable (often not allowed) for people in special circumstances.
4. After purchasing an insurance policy there is usually a 14-day 'cooling off' period. Read through the policy and if it is insufficient or inappropriate you will entitled to a refund (unless travel has already started or a claim has been made),
5. Insurance companies may raise a defence of non-disclosure (see below) to test the good faith of claim (Clarke 1997: 184). If this happens do not give up on making the claim.

Disclosure of disability and illnesses

Failure to disclosure information about disability or illness could lead to the insurer refusing the to pay in the event of a claim. When applying for insurance, the insurer will usually ask about pre-existing conditions. However, in English law answering these questions accurately and honestly does not mean that the insurance company is obliged to pay if known pre-existing conditions that were not covered by the questions are later found to exist. The burden of responsibility is on the applicant to disclose any relevant information and forgetfulness or ignorance of one's medical condition is no defence. The (now defunct) Insurance Ombudsman took the view that if the insurer does not ask clear questions, then the insurer has waived discussion of the matter. Whilst this is not the position of the law (Clarke 1997:85), insurance companies may pay out to protect their reputation.

Discrimination

Insurance companies are not permitted to discriminate against unless they can show "actuarial or other data from a source on which it is reasonable to rely" (see Clarke 1997:259-260). It is this clause that permits insurance companies to charge more to disabled customers for travel insurance, men than women for car insurance and self-employed women than self-employed men for health insurance.

Bibliography

Clarke, M. (1997) Policies and Perceptions of Insurance. An Introduction to Insurance Law. (Oxford: Clarendon).

Related links

BBC Watchdog Guides to Insurance
www.bbc.co.uk/watchdog/guides_to/insurance

European Health Card
www.europa.eu.int/comm/employment_social/news/2003/feb/hicard_en.html
This is for information only for UK citizens, as the UK government has yet to implement the scheme.

Financial Ombudsman
www.financial-ombudsman.org.uk
This body has taken over the Insurance Ombudsman with respect to disputes about insurance.

Higher Education Mutual Association (UMAL)
www.umal.co.uk
Organisation that insures most HEIs in the UK.

Lewis, M. (online) Cheapest Travel Insurance
www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1083570446,24889,
The multi-trip annual policies discussed here are insufficient for most residence abroad students, but the tips for finding a good deal are helpful.