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Peter Hayman, Director of P J Hayman Travel Insurance Specialists, comments on the increase in Air Passenger Duty, how this affects claims, and how it may result in more uninsured travellers.
“The increase in Air Passenger Duty (APD) on the 1st November highlights a problem which many travellers may not be aware of until they have to make a claim. APD should be recoverable from the airline as it is only payable if the traveller departs. Unfortunately, many airlines, particularly the budget ones, charge an administration fee which can be more than the APD itself.
“The cancellation section of a travel insurance policy typically provides cover for travel costs that are "irrecoverable" or “not recoverable elsewhere”. Also, some policies are very explicit and make airport departure duty a specific exclusion. At the claims stage the attitude of Insurers varies. Some will adopt a pragmatic approach with the customer being able to recover the fee charged by the airline to obtain the APD refund whereas others will not.
“We believe there should be a consistent approach by the travel insurance industry to deal with genuine cases where customers have incurred costs which are not recoverable. However, most importantly, airlines should play fair and hand back the tax which is not payable to the Government until people fly.”
Rise in APD could increase the number of people not taking Insurance
“Figures published by ABTA and elsewhere show an increasing percentage of people not taking travel insurance. It is estimated that 20-25% of people are now electing not to purchase cover. The increase in APD will make it even more expensive to travel, particularly for long haul destinations and there is therefore a risk of the number of uninsured travellers increasing. It is ironic that the Foreign & Commonwealth Office is promoting the need for people to take out insurance through it’s ‘Know Before You Go’ campaign and yet the Treasury, by imposing increases elsewhere, including the hike in Insurance Premium Tax, is making it more likely that people will not buy cover.
“Not taking travel insurance is a false economy with claims costs considerable even for short haul destinations such as Spain and Turkey.”
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
