Ten reasons why your travel insurance could refuse to pay out

Some insurers won't pay out if you are hiking above a certain altitude - Getty Images Contributor

Buying the cheapest travel insurance the day before you are about to set off on your journey could cost you dearly if you need to make a claim. 

Travel insurance policies are riddled with clauses and exclusions, and different providers set their own standards and thresholds on a range of some of the most common claim areas. 

Even if you choose a provider specifically because they cover certain eventualities, failing to read the small print could mean your claim is rejected. 

Here is a list of 10 areas where policies can differ.

Altitude

Insurers have different rules on the height above sea level for treks that they will cover as standard, meaning many won't pay out if you are hiking above a certain altitude. Most policies exclude trekking above 3,000m, so climbing Kilimanjaro or walking to Machu Picchu would need specialist cover, which can be arranged by speaking to an insurance broker. 

Alcohol

Alcohol exclusions are surprisingly common in travel insurance policies – and a major cause of complaints to the Financial Ombudsman Service when insurers refuse to pay. Many policies will contain some form of alcohol exclusion, but each will word things in a slightly different way. Some may refer to "blood/alcohol reading levels",  the "misuse of alcohol", or "being under the influence" as grounds to reject your claim. 

The ombudsman says insurers cannot simply assume that certain injuries are alcohol-related, and must provide CCTV footage or witness evidence if hospital blood tests are not available.

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Cancellation

According to the British Insurance Brokers Association (BIBA), cancellations are one of the most common causes for complaints, but insurers will differ on how they pay out. 

Some policies now allow you to claim for cancelled travel expenses with a "however caused" clause, meaning you are covered for whatever reason you needed to cancel your trip, be it a volcanic ash cloud grounding your plan or an illness. 

Others will only cover basic cancellation risks, such as serious accident or jury service. 

Scuba diving

Scuba diving coverage varies depending on how deep you dive. Some will insure you down to 15m, while others provide cover down to 30m if you are accompanied by a qualified instructor or you have a diving qualification and are not diving alone. With some insurers, your claim may be rejected if you fly within 24 hours of your last dive.

Terror

Due to a supposed increased risk of encountering terrorism when travelling abroad, some insurers will now pay out on terror grounds. For example, some will cover the cost of lost deposits if there is a terror attack in a country you are planning on visiting that makes you change your plans. Some also cover cancellations for the same reasons, but these types of cover are fairly new and will only be found among specialists. 

Excesses

The excess is the amount you have to pay towards any claim – but it is not straightforward. Some policies apply one excess fee per claim, but others will demand an excess payment for every relevant section of the policy. If a handbag gets stolen, for example, some insurers will charge one excess, while others could charge more.

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EHIC

The European Health Insurance Card (EHIC) is free and entitles you to free or discounted medical care in state-run hospitals and medical clinics across the EU as well as in Iceland, Norway, Liechtenstein and Switzerland. Since this helps reduce your medical costs abroad, some insurers will either reduce or waive their excess.

Delay

If sitting waiting at an airport for a delayed flight becomes too much and you decide to cancel your trip – check how long you have waited first. A large number of insurers say they need a 24 hours' delay before covering cancellation costs, but others will cover cancellation if you give up after delays of 12 hours.

Valuables

If you are taking an iPad, Kindle or laptop away with you – or any other expensive item – make sure you check your valuables limit (assuming the items are not covered by your home insurance). The minimum and maximum you can claim for on a damaged valuable can range from £50 into the thousands. 

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Cruises

Some policies for cruises may not specify cover for missed departure from ports. While this won't be an issue for most, for those flying or traveling a long way to meet their ship, such cover is important. Cruise holidays also tend to be more expensive, so check to see if the cancellation limit matches how much you paid for your cruise so your insurer cannot avoid paying out.