Is there a Red Light District buried in your travel insurance policy?

Amsterdam and in particular its Red Light District has long been an attraction for tourists and revellers. Lauded for its transparency and open mindedness surrounding Ladies of the Night and recreational drugs it is nevertheless a place with less transparent dark corners and concealed dangers.

What has this got to do with Holiday Travel Insurance you might well ask? Well Red Lights are also warning signs and The Red Light District of your travel insurance policy exists wherever you see the words Exclusions and inner limits.

Quote comparison web sites will reveal the insurers they consider to be the top travel insurers. The writer selected one at the top of one such list (a very good place to be….especially if you haven’t paid to be there!!!) and started reading.

In the first few pages the provider of the insurance declares it is based and registered in Gibraltar. Mmmm, why is that you wonder.

A quick quote revealed that for very modest premiums you get a choice of three fabulously valuable options, given shiny precious metal names ‘Silver’ ‘Gold’ and ‘Platinum’.

The policy is a disturbing forty six pages long, providing…or not providing, cover under twenty odd different Sections and Sub Sections of cover. There is also an extremely large amount of small print words crammed into those forty six pages.

Hope you’re not bored yet. We are only up to page four out of forty six…..


We know all insurance policies contain exclusions and financial limits under each section. The trouble with travel insurance is they can vary dramatically.

Unfortunately online quote comparison sites don’t compare complicated exclusions.

Let’s examine just two remarkable and illuminating danger areas in the first case particularly relevant to many travellers to Amsterdam in the randomly chosen policy;

– Alcohol, Drugs, Sexually Transmitted Diseases: The selected policy contains a total exclusion of claims under all twenty odd sections of cover for ‘Any claims arising directly or indirectly from using alcohol or drugs or you being affected by any sexually transmitted disease’…… It should perhaps be better phrased ‘no sex, drugs, rock and roll, or alcohol clause’. Even moderate use of alcohol or soft legal drugs is prohibited.

– Personal Belongings and Baggage; Under the highest value Platinum policy the financial limit was £3,000 which seems okay for the majority. However there is an inner limit for ‘any one item, pair or set of items’. This is just £250. There is also a £50 excess and claims are not paid on a new for old basis. Any item over two years old will be devalued by 40% and up to 80% if over 5 years old.

Now you might say that all insurers selling these types of policies especially to people travelling to places like Amsterdam are being unfair and should even be flogged publicly and yes you could argue insurers do still lead buyers up the garden path in some ways.

The reality is that insurers are forced by customers and competition to tailor their premiums to meet demand and then work out what cover they can afford to give.

With some insurers offering travel insurance from as low as five pounds it is not hard to see why those insurers must severely restrict the cover almost to the point of being unable to afford to pay almost any claims and at the same time remain solvent.

More expensive policies are likely to be more realistic and might either have no similar exclusion or may refer to the exclusion of claims arising from excessive use of alcohol and even drugs and limits will be more realistic.

Buyers need to wise up, take more time to read policies before buying and be more aware of the dangers in order to avoid exposing themselves to more than just a bit of mild sun stroke, or dicky tummy.

Top Tips for buyers of Travel Insurance;

– More is less. More words in a policy usually means more ‘Exclusions’ and less cover

– The cheaper a policy is usually means more ‘Exclusions’

– What headline sections of cover giveth, ‘Exclusions’ can taketh away

– Quote comparison sites do not compare ‘Exclusions’

– The more you pay the fewer ‘Exclusions’ you are likely to get

– The internet is a good place to do DIY research but you still can’t beat research by an expert insurance adviser

– High value belongings are better insured under a home or business insurance policy offering new for old cover and no inner limits or limits which are more realistic

Travel insurance remains a very important thing to take with you on your travels, but if it was dirt cheap be realistic about its worth. Low cost usually equates to low value, so get a bit of real advice from an expert and be prepared to pay more if necessary.

When push comes to shove and you have to make a claim, you will find the most expensive insurance policy is always the one that does not pay claims.

Take care and enjoy your travels.