Beware of insurance small printYour policy may not be as reliable as you think

03 May 2007

Complicated policy definitions and exclusions in the small print mean some insurance isn't always as reliable as people think, which.co.uk warns today.

People who fail to tell their insurer about a past health problem – even something as minor as a visit to the doctor about a headache a couple of years earlier – could have their insurance claim turned down.

One in five critical illness insurance (CII) claims was rejected in 2005 for failure to disclose health issues or because the illness claimed for wasn't covered by the policy – but with complex medical definitions it can be almost impossible to know what is covered.

Payment protection insurance (PPI) should pay out when people are unable to work, but often excludes two main causes of absence from work - back pain and stress-related illnesses.

Payment protection

It has a particularly poor record for successful claims – in 2005, the amount paid in claims was only 20 per cent of premiums paid.

People buying travel insurance should also check the small print – as well as exclusions for existing health problems, there can be strict time limits on reporting lost or stolen items which can make it very difficult to claim successfully.

Which.co.uk also warns against buying expensive, unnecessary insurances such as extended warranties, overdraft cover and identity theft insurance.

Which.co.uk editor Malcolm Coles said: ‘It’s easy to assume that if you take out insurance you're protected if things go wrong, but check the small print carefully and make sure you understand what is and isn't included before you buy – or you might find it’s worthless.’