Travel insurance may cover you less than you think if you fall ill abroad

Having travel insurance means that if something goes wrong while you're away, at least you won't be responsible for the cost of putting things right and left out of pocket. That's the theory, anyway. The reality is often very different. Travel insurance buys you peace of mind on a lot of fronts. Many policies will pick up the tab for necessary medical expenses if you have an accident abroad, refund your costs if you have to cancel or cut short your holiday because of illness, and compensate you if possessions are lost or stolen. But there are limits to the benefits they offer. Guardian Money readers John and Katherine Harvey from Derbyshire found this out the hard way. While on holiday in Florence, John contracted pneumonia and was in hospital for eight days, forcing them to stay in Italy 18 days longer than planned. As a result, they say they are out of pocket by more than £1,500 for costs that were not met by their travel insurance, a Direct Premier Annual Travel policy from Bupa costing them £135 a year. The couple spent around £600 on taxi trips to and from hospital and on phone calls, many of them to Bupa and its assistance company First Assist back in the UK, and another £1,100 on food and other costs. "It's not easy to live cheaply based in a hotel room in central Florence," Harvey says. While in Florence, it proved difficult to try to find out exactly what expenses would be covered. "Our calls were fielded by a call centre. The onus to call was on us, calls from the hotel were ludicrously expensive, and different people in different sections dealt with different parts of the claim," says Harvey. "We waited hours for call-backs that never came, and nobody could give us the full picture of what we were covered for. A daily allowance to help with the expenses of being stranded abroad was mentioned, but no one could tell us how much it was." Comforted by the promise of up to £5m under the heading "Medical emergency and other related expenses" in their policy document, the couple assumed this would include reasonable cover for the expenses of their stay. "I didn't expect it would cover all our costs, but I expected a reasonable contribution towards the significant costs of an extended stay in an expensive city for two people," says Harvey. Discovering the truth when they arrived home was a shock. "The items that were covered were considerable," he acknowledges. Bupa paid out £2,300 for 18 extra hotel nights direct to the hotel, £570 for doctor consultations and prescriptions, and it arranged and paid for the flight home. But the only payment the Bupa policy makes towards extended stay expenses including food, phone calls and taxis is a daily hospital benefit of £15 for each full day spent in hospital which, in Harvey's case, amounted to just £120. "To find there was a gap in the cover of this size was surprising," he says. "£15 a day for two people for eight days out of the 18 we had to stay there covered only about 7% of our actual costs. I imagine a lot of people assume they are better covered than they actually are." When Money brought the case to Bupa's attention, it told us: "We are sorry the experience Mr and Mrs Harvey had during their recent trip to Italy may not have been up to our usual high standards. As a gesture of goodwill, we will be reimbursing them with €100.40 (£88) to cover the cost of itemised telephone calls they made to Bupa and First Assist. We will also be reimbursing €76 they spent on taxi fares to and from the hospital for treatments." The fact is that Bupa is not alone in providing no cover for such expenses other than a daily hospital allowance. Most travel policies do the same. Greg Lawson, chairman of the Association of Travel Insurance Intermediaries, says: "In cases like this, most policies pay all your medical expenses and any necessary extra accommodation costs and return travel costs for the patient and their partner. They also typically pay a £20 to £30 daily hospital benefit for each day you are in hospital, which is meant to help towards extra expenses like phone calls and taxis." Food costs may be a matter of negotiation if, say, your accommodation was booked on a half board, full board or all-inclusive basis, Lawson says. But, he adds, "the idea of travel insurance is to cover emergency costs, not generally to replace costs like food that you'd normally incur whether at home or away. So while the daily benefit is normally enough to go some way to paying for food and taxis, you would normally expect there to be a shortfall, particularly if you've got a distance to cover to and from the hospital, or you are forced to eat out." The amount of hospital benefit does vary from policy to policy. InsureandGo, for example, pays £20 per day up to £1,000 on its bronze and silver policies, and £30 per day up to £1,500 on its gold and platinum. Boots' multi-trip policy pays £10, £20 or £30 per day, up to £1,000 in total, depending on the level of cover. The Post Office pays £15 a day, up to £800; Marks & Spencer £20 a day, up to £700; the AA £25 per day, up to £600; Saga £25 a day, up to £1,000; and the Halifax £50 a day, up to £1,000. If your expenses are particularly high for reasons beyond your control and you have receipts to prove this, it may be worth arguing your case.