Dual Travel Insurance

Imagine being on your dream holiday, soaking up new experiences, trying delicious cuisine, and making lifelong memories. Now picture a scenario where you need to submit a travel insurance claim. As you search through your emails for your policy documents, you realise—you have two different travel insurance policies for the same trip. What now?

This situation, known as dual insurance, is more common than you might think. While being covered by multiple policies may seem ideal, it does come with some nuances worth understanding. In this guide, we delve into the realm of dual insurance, examining its nature, the potential risks it entails, and strategies for prudent management.

What is Dual Insurance?

Dual insurance (also known as double insurance) is, as it sounds, having two or more insurance policies covering the same event and the same types of risks. For example, you might hold two travel insurance policies for a winter getaway, both protecting you against trip cancellations, medical emergencies, and lost luggage.

Dual insurance isn’t limited to travel; it can happen with home, motor, health, and other insurance types. While it might seem complicated, it’s often unintentional and can be managed effectively.

How Do You Become Dual Insured?

Usually, being dual insured occurs by accident. The most common scenarios are as follows:

Buying Two Insurance Policies

With our busy lives, it can be easy to forget that we have already purchased our travel insurance for our holiday, so it is common for people to buy two different policies by accident.

Unknown Account Benefits

Some packaged bank accounts or credit card memberships come with travel insurance included as one of the account benefits. It can be easy to not realise that you already have travel insurance in place.

Auto-Renewal

When buying an Annual Multi-Trip policy, some providers will opt you into an auto-renewal scheme, whereby they will renew your policy for you, unless you explicitly advise them, that you would like the policy to lapse. Unbeknownst to you, you proceed with buying travel insurance elsewhere, only for your policy to be renewed.

Annual Multi-Trip vs Single-Trip Policies

Imagine you have an Annual Multi-Trip travel insurance policy in place, which provides you cover for Europe but does not include cover for cruises. You decide that you do not want cruise cover in place for a whole year, so you then opt to buy a Single Trip policy, for your upcoming European cruise.

READ MORE: Travel Insurance Types and Benefits

What Are the Risks of Being Dual Insured?

While having multiple insurance policies might initially seem like a very sturdy safety net, providing added layers of protection, it can create a host of unnecessary risks and complications. Understanding these potential pitfalls can help you make informed decisions about your insurance policy.

Claim Delays

One significant risk of having dual insurance is the potential for delays in getting your claims processed. When you have policies with multiple insurers, there can be confusion and debate over which company should take responsibility for covering your claim. This back-and-forth between insurers can lead to significant delays in processing and payment.

Additional Excesses

Another issue to consider is the potential for additional excess charges. When you submit a claim whilst dual insured, you might be subjected to excess fees from both insurers. This means that before receiving any reimbursement, you could face increased out-of-pocket costs as both companies apply their excess charges.

READ MORE: What Is A Travel Insurance Excess?

No Extra Payout

It's important to note that dual insurance does not equate to higher or additional payouts. Insurance companies have coordination agreements to ensure that the total payout for a claim does not exceed your actual loss. Thus, having two policies won't result in double the compensation; it will only cover your actual expenses. This also means that paying two premiums doesn't provide you with any additional financial benefit when it comes to claims.

Potential Risk to Commit Fraud

In the worst-case scenario, dual insurance can inadvertently increase the risk of committing insurance fraud. If you submit the same claim to multiple insurers without declaring your dual policies, it can be perceived as an attempt to gain profit from the insurance system. This is illegal and carries severe consequences, including legal action and potential penalties.

What Should I Do if I Am Dual Insured?

Whilst being dual insured isn't illegal; it can pose difficulties, and you should try to act where able.

Identify Gaps and Overlaps

The first step is to identify potential gaps and overlaps in your different policies. For instance, you may have a travel insurance policy with your bank that provides cover for holidays only in Europe, but you are planning a trip to the USA. Alternatively, you may discover that both policies provide cover for your luggage.

The easiest way to highlight these areas is by thoroughly reading the policy documentation for each of your policies. This will help you to pinpoint which policy provides more comprehensive protection.

Compare Cover Limits, Exclusions, and Excesses

Next, take a moment to thoroughly compare the benefits of each policy. This involves a detailed examination of several key aspects. First, consider the cover limits, which refer to the maximum amount you can claim under the policy. It's crucial to know how much protection you have in various scenarios.

Then, look at the excesses, which is the amount you are required to contribute to a claim. A lower excess might mean a higher premium, but it could save you money in the event of a claim.

Additionally, review the exclusions, which outline things that are not covered, such as specific activities or destinations. Understanding these exclusions can prevent unpleasant surprises when you need to make a claim.

READ MORE: Travel Insurance Exclusions

Check Medical Protection

If you have a pre-existing medical condition, it is crucial to ensure that your conditions are adequately covered under your travel insurance policy. Most travel insurance options provided through credit card memberships or packaged bank accounts tend to be standardised, offering basic protection that might not cover existing conditions.

These policies often provide a generic level of protection designed to cater to the average traveller, which means they might overlook specific needs related to ongoing medical issues. Therefore, it is important to thoroughly review the policy details and consult with the insurance provider to confirm that your medical conditions are included in the policy. This extra step can help prevent unexpected expenses and complications while travelling.

What Next?

Finally, once you have conducted your analysis, it is time to decide whether to cancel the policy that doesn't tick all of your boxes, or if it's on your credit card or packaged bank account, request for it to be removed, and perhaps swapped for an alternative benefit (if able).

However, before making that decision, you may need to update or amend the policy you wish to keep, by speaking with your provider to see what you can add or amend to the policy. You want to make 100% sure that you are not leaving yourself exposed and without protection in place.

Navigating the world of dual insurance can be challenging, but it is essential for frequent travellers and insurance policyholders aiming to optimise their protection. Understanding what dual insurance entails, recognising the risks involved, and taking the necessary steps to manage it effectively are crucial to ensuring you have the right level of protection.

Take time to review your insurance policies and make informed decisions to avoid the pitfalls of dual insurance. Doing so can save you from unnecessary financial burdens and give you the reassurance you need while travelling.

Remember, knowledge is power, and being informed about your insurance protection is the key to travelling with confidence. Consider consulting with a financial planner or insurance advisor if you need further guidance on managing your policies.