It has been suggested that insurers are now taking a harder line when considering whether a claim should be declined due to excessive consumption of alcohol. This issue has recently attracted press interest, with several articles featuring in national newspapers and also reported on by the BBC.
Most travel insurance policies exclude cover where there has been excessive alcohol consumption. While this is not altogether unreasonable, as with all terms and conditions, it is how they are constructed and the quality of the evidence relied upon that is most crucial for the insurer.
There has been a rise in the number of cases reported to the Financial Ombudsman Service (FOS) in which insurers have refused to pay out due to an 'alcohol abuse' exclusion clause in the policy. The FOS has stated that it will apply a high standard of proof from insurers, such as evidence from blood tests. Suspecting alcohol abuse because someone smells of alcohol, was seen drinking or other similar speculative scenarios are unlikely to meet the required standards of proof. The onus is instead on the insurer to demonstrate why an exclusion should apply and to provide persuasive evidence.
Interestingly, the official advice to consumers from the Association of British Insurers (ABI) on its website is: "you are on holiday, so drinking a reasonable amount of alcohol is not excluded". However, it is only fair that insurance cover is granted on the premise that policyholders adopt a sensible approach to alcohol intake and do not subject themselves to unreasonable risk, particularly through excessive consumption of alcohol.
Insurers need to ensure that travel policies clearly explain and define when alcohol consumption is likely to make a claim invalid. They will also need to produce clear and reliable evidence to show alcohol abuse and that it was a factor in the claim if they are to maintain a declinature and avoid the FOS ruling against them.