Reply To: Nationwide travel insurance changing

[JDB]

Ihar wrote:

I don’t really understand the issue here. Insurance is supposed to make you “whole” for unforeseen circumstances (in this instance). So they should be providing the same class of travel (indeed my Barclays insurance specifies it, up to a £5kpp limit). The payment method is of no relevance, unless you are requesting a refund for a cancelled trip – in which case attributing a monetary value to the Avois/points of perfectly reasonable. But that’s different from providing alternate travel to “make you whole” (e.g. For a missed flight) where the cost of the immediate alternate travel might be much greater than the original sum paid.

My insurance also does not cover: “Travel and accommodation costs paid for using loyalty, reward or points schemes”. However – when this is taken into context – it means it will not reimburse you the cash rack rate for a hotel when you paid using points (although the insurance/FO might agree the lesser of the points/cash value).

The issue is that policyholders need clarity. When you refer to “context” that then becomes your personal interpretation. A literal reading of the new Nationwide policy (which uses the identical phrase as HSBC Premier, also Aviva) gives an unfair outcome for a common class of traveller.

You have correctly identified that ‘points’ are a form of payment accepted by airlines and hotels, so insurers need to compensate those people who have used that form of payment if there is an insured event. The quantum of the claim will depend on the cost and the circumstances.

Re class of travel, some policies, including Amex Plat, put you in economy irrespective of the class originally booked.