Insurers criticised for failing people with mental health problems

Even a year ago, few of us would have been able to quote the headline mental health figure – that half of us will experience a mental health problem at some point.

But we know it now.

Very, very slowly it seems we’re reassessing and updating our views. We are suddenly realising that ours is a society full of individuals who know what it is to battle with their own brain for the smallest window of clarity or relief.

But the massive, prominent and highly influential financial services industry doesn’t seem to be taking part in this national movement.

As another summer comes to a close and we all pretend we’re not starting to eye up future breaks already, worrying new figures have lifted the lid on the latest evidence of their failure to appropriately deal with millions of people.

Some travel insurers are treating customers with a history of mental health problems unfairly, dramatically increasing premiums for no obvious reason often years after their condition has been successfully treated.

Ben Rathe, 30, from London, was diagnosed with depression in 2012.

“I went on a course of antidepressants and cognitive behavioural therapy,” he says. “It was all very successful and today I consider my mental health as good. Just like if I broke my leg six years ago, I have to be a bit careful, but it has no impact on my day-to-day life.

“I have no other medical issues but when I [declare my mental health history] on an application, my travel insurance premiums go up by around 55 per cent.”

Rathe says he understands how insurance and risk works but doesn’t understand how one historic diagnosis has to be carried with him forever in a way other medical history isn’t.

“I’m at the mild end of mental health problems,” he says. “I can understand there are higher risks with people who have been hospitalised and who have cancelled holidays in the past because of their mental health.

“I want to understand what is going on here. I don’t think insurance companies are greedy or evil. But there’s clearly a model that is just throwing out a number. It’s as if I’m being punished for something historic that I have no control over.

“For me it’s not a problem but for someone who does have ongoing mental health problems with side effects, such as a lack of attention to detail or fear of getting in deep in this kind of thing, the whole application process could also be very difficult.

“Especially if you’ve been open and honestly disclosed them, you may have to call a stranger in a call centre and discuss the fine details of your mental health. It could be quite traumatic.

“The process has to be more transparent, more accessible with fewer barriers. Otherwise you could easily push people towards not informing insurers at all, which does nobody any good.”

That’s exactly what’s happening. Research out this week from the Money and Mental Health Policy Institute found that the sky-high premiums and punitive application process means 45 per cent of those with mental health problems “never disclose” the issue to their travel insurer, compared with around 6 per cent of people with physical health problems.

One in three people with mental health problems have travelled with no insurance to cover their mental health, either because they didn’t take out insurance because it was too expensive or because their mental health was excluded from the cover they could get.

Through a mystery shopping exercise, the charity found that several insurers hiked premiums by more than fourfold for people who disclosed mental health problems that have been stable and effectively managed for a very long time, with some insurers still declining to offer cover. Premiums shot up by between 500 per cent and 2,000 per cent for those who disclosed more severe mental health problems, with most insurers either declining to offer cover at all or only offering cover that excluded mental health.

Helen Undy, the charity’s director, says: “Extremely high premiums and limited access to appropriate cover leave many people who have mental health problems struggling to get suitable travel insurance. We are pleased that the regulator has plans to improve signposting to specialist insurers, but this only addresses part of the problem.

“When an historic episode of depression leaves you unable to afford travel insurance, or you’re charged more for cover that states it won’t pay out for anything related to your mental health, it’s no wonder it feels unfair. Half of us will experience a mental health problem at some point in our lives, which could have a long-term impact on our access to insurance. If the mainstream travel insurance market doesn’t work for half of customers, then it’s really not working at all.

“The way insurance companies calculate risk, and set their prices, is determined behind closed doors. Only the regulator has the data needed to check if it’s truly fair. Given the high prices that many people with mental health problems face, and the harm they experience as a result, it’s time the regulator took a closer look.”

The charity is asking the Financial Conduct Authority to formally review whether travel insurance pricing for this group complies with the Equality Act 2010.

“We welcome the research by Money and Mental Health Policy Institute around those with mental health conditions being poorly served, insensitively treated or all together unable to find travel insurance cover,” says Sarah Page, brand manager from Insurancewith.

“Having a mental health diagnosis myself, I can completely empathise with those finding it difficult to find appropriate and affordable cover for their upcoming trips. In the past I struggled to find cover when the only thing I needed was a break from everyday life, and couldn’t understand why no one would cover me. I wasn’t more of a risk than someone walking down the street with say, asthma.”