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Alcohol and travel insurance: The catch Aussies need to know about
Too drunk to insure. How much is too much when it comes to alcohol and travel insurance?
Having a few drinks while on holiday could leave you with more than just a sore head.
While letting your hair down on holidays and having a drink is common, most travel insurance policies have an exclusion along the lines of:
We will not pay for claims arising directly or indirectly from any conduct engaged in by you whilst under the influence of alcohol or drugs, unless prescribed by a doctor and taken in accordance with the doctor’s advice.
This guide looks at what "under the influence" means and in what circumstances insurers will pay alcohol-related claims.
Is there travel insurance that covers alcohol?
A common question travellers have is, "Will your travel insurance cover you if you're under the influence of alcohol?" Normally insurers will have a general exclusion that prohibits claims where alcohol was the root cause, which can be a nasty shock.
Insurers see a lot of claims that are related to alcohol consumption, which is why this exclusion is designed to not only encourage you to be mindful of how much you're drinking while you're on holiday but also limit the risk to the insurer. The question of whether you're covered for drinking alcohol really comes down to how each insurance brand interprets its own exclusion.
|1cover||To the extent permissible by law, 1cover will not pay if you were under the influence of any intoxicating liquor or drugs except a drug prescribed to you by a medical adviser, and taken in accordance with their instructions.|
|American Express||AMEX will not pay for claims arising directly or indirectly from any conduct engaged in by you whilst under the influence of alcohol or drugs, unless prescribed by a doctor and taken in accordance with the doctor’s advice.|
|Budget Direct||Budget Direct will not cover the following any claim arising directly or indirectly from using alcohol or drugs (unless the drugs have been prescribed by your doctor).|
|Columbus Direct||You are not covered under any circumstances for any claim arising directly or indirectly from sexually transmitted diseases, alcoholism, drunkenness or the use of drugs (other than drugs taken in accordance with the treatment prescribed by a registered medical practitioner but not for the treatment of drug addiction).|
|FastCover will not pay under any circumstances if you were under the influence or addicted to intoxicating liquor or drugs, except a drug prescribed to you by a medical adviser, and taken in accordance with their instructions.|
|InsureandGo||You are not covered for any claim arising directly or indirectly from you, your partner, relative or your travelling companion using or consuming alcohol or drugs (unless the drugs have been prescribed by your doctor) or where you, your partner|
|itrek||Itrek will not pay under any circumstances if you were under the influence or addicted to intoxicating liquor or drugs except a drug prescribed to you by a medical adviser, and taken in accordance with their instructions.|
|Skiinsurance.com.au||Skitravelinsurance.com.au will not pay under any circumstances if you were under the influence or addicted to intoxicating liquor or drugs except a drug prescribed to you by a medical adviser, and taken in accordance with their instructions.|
|Any claim arising directly or indirectly from using alcohol or drugs (unless the drugs have been prescribed by your doctor)|
|There is no cover under any section of this policy for any claim arising directly or indirectly because of you or a member of your travelling party being under the influence of, or is addicted to, intoxicating liquor or a drug, except a drug taken in accordance with the advice of a registered medical practitioner|
|Travel Insuranz||You are not covered for claims arising out of whilst affected by alcohol or any other drug with the exception of medically prescribed drugs used in accordance with dosage and directions provided to you by your medical practitioner.|
|Virgin||To the extent permitted by law Virgin will not pay if Your claim arises directly or indirectly from, or is in any way connected with you being under the influence of any intoxicating liquor or drugs except a drug prescribed to you by a medical adviser, and taken in accordance with their instructions.|
|World Care||WorldCare will not pay under any circumstances if you were under the influence of any intoxicating liquor or drugs, except a drug prescribed to you by a medical adviser, and taken in accordance with their instructions.|
|YouGo will not pay for claims involving your suicide, attempted suicide, self-inflicted injury or condition, stress, travel exhaustion, any conduct engaged in whilst under the influence or effect of alcohol or drugs, the effect of or chronic use of alcohol or drugs or the transmission of any sexually transmittable disease or virus.|
How do insurers generally treat alcohol?
Many travellers have asked the question (and rightly so): "How does an insurer know you were under the influence?" Unless you're drug-tested or breathalysed, an insurer can't know for certain how much you had to drink.
While some insurers have been accused of using the alcohol exclusion to outright deny claims, most are fair and reasonable and assess each claim on its own merits. Generally it comes down to whether alcohol contributed to the incident, rather than simply whether alcohol was involved.
Some use the yardstick that applies to all aspects of insurance: "Was the incident unexpected?" This simply means would a reasonable person expect their actions, in this case drinking too much, lead to an incident that could have negative outcome such as a claimable event? If the answer if yes, then the incident was not unexpected and would therefore not be covered.
Many insurance brands try to take the guess work out of what will and won't be covered in relation to alcohol by listing the claims conditions in their product disclosure statements (PDS). Below are some of the conditions from the travel insurance brands in our panel:
Some insurer-specific examples
Whether you're covered for alcohol consumption when overseas depends very much on how your insurer interprets the exclusion. The following examples show how three separate insurance brands deal with claims involving alcohol:
- Southern Cross Travel Insurance. The "reasonable person" test. SCTI cite having a few beers and then slipping over as an example of a reasonably unexpected event. Southern Cross contrast this with drinking all night and then jumping off a seawall, not realising the tide is out, as an example of an event that is not unexpected. Because a reasonable person could perceive an injury risk, no claim would be paid in this instance.
- Cover-More. Cover-More take a slightly different tact and determine whether a claim is payable IF alcohol contributed to the incident or not. This means assessing the nature of the incident and if it would have occurred if you had consumed alcohol or not.
- Travelinsuranz. Travelinsuranz goes a step further and determines the extent of liability by the degree to which alcohol contributed to the incident. Rather than flatly denying the claim, Travelinsuranz will decide how much of the claim it will pay, based on how much the consumption of alcohol played in the event.
Methanol poisoning and travel insurance
Methanol poisoning occurs when someone consumes homemade alcohol containing methanol, a pure form of alcohol similar to ethanol. Not normally present in commercially produced spirits, methanol is converted by the body into a toxin called formic acid. This can build up in the blood and cause kidney failure, heart problems, liver damage, blindness, nerve and brain damage and ultimately death and as little as three teaspoons is all it takes.
Travellers to South East Asian holiday destinations such as Bali and Thailand are considered most at risk of methanol poisoning due to widespread home brewing of spirits and substitution of drinks by disreputable bar owners. Authorities warn that the best way to guard against methanol poisoning is to be wary of offers of free or discounted drinks and not to drink anything unless it comes from a sealed bottle or can.
How is methanol poisoning treated?
Treatment for methanol poisoning involves seeking medical assistance as quickly as possible. At a hospital, a doctor will administer ethanol or a drug called fomepizole, both of which will inhibit the formation of formic acid in the body. Prompt treatment can reduce many of the toxic effects of methanol poisoning, but the trouble is those who drink several methanol laced drinks often go to bed drunk, allowing the more severe symptoms of methanol poisoning to develop over the next 12 to 24 hours.
As well as exposing yourself to the risk of methanol poisoning, drinking to excess at any time in a foreign country with different laws to our own is not considered wise. It can lead to accidents, assaults and robberies; all of which will not be covered by your travel insurance if your alcohol intake was a contributing factor. And with medical evacuation back to Australia capable of costing over $100,000, travel insurance is not something you want to be without.
Most insurers look at alcohol related claims on a case-by-case basis, so if you consume one methanol laced drink and suffer methanol poisoning, you would normally expect to be covered. But most travel insurance policies contain a blanket drugs and alcohol exclusion and it is up to the individual insurer as to how this is interpreted, so far better to play it safe and drink with caution when holidaying overseas.
Insurers have been known to refuse claims from people who've had their drinks spiked or suffered methanol poisoning from dodgy cocktails. So be careful what you drink.
How does travel insurance work when it comes to drug use?
A common exclusion listed in every travel insurance policy is that your claim will not be paid if it arose because you were under the influence of intoxicating liquor or drugs, unless the drugs were prescribed by a medical adviser and taken as directed. Unfortunately, many travellers are completely unaware of this exclusion and the many ways it can affect their cover.
Medical claims that arise because you are under the influence of or addicted to drugs will not be covered. For example, if you smoked marijuana in Thailand, hopped behind the wheel of your hire car and were then involved in an accident, your travel insurer would not provide any cover for your medical expenses, legal liability or rental vehicle insurance excess costs.
The drug use exclusion can even apply to people who aren’t even travelling with you. If you are forced to cut your trip short and return home following the serious illness or death of a relative as a result of drug use, your insurer may not provide any cover for cancellation or curtailment costs.
Booze bust: Why alcohol and travel insurance don't mix
Having a drink can be an enjoyable part of any overseas holiday, but if you want to be covered by your travel insurance, you should understand your insurer’s attitude to alcohol before you take out your policy. If they have an alcohol-related exclusion that is not clarified in the policy, it would be worthwhile talking to one of their representatives to see exactly where you stand. Otherwise your drinks overseas could turn out to be very expensive indeed.
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