Useless British insurance policies

Insurance policies are designed by lawyers with one thing in mind - to boost the odds in favour of the insurance company so you stand as little chance as possible of having your claim paid.

The lawyers do this by hiding "get-out" clauses, otherwise called policy exclusions, in the small print of the insurance contract. Sometimes, insurers will take pity and pay a claim, despite being legally entitled to deny it. However, this is not always the case. Reading the small print of your policy or enlisting the services of an insurance broker when buying a policy is the only way to stay a step ahead of the lawyers. Here, Times Money has compiled 25 of the more outrageous insurance exclusions to watch out for.

1. Ever thought of cricket as a "hazardous activity"? It is more than likely your travel insurer does. Most policies classify cricket as a dangerous activity and, as such, if you are injured whilst indulging in a few overs on your next holiday, you could learn the hard way that your medical bills aren't covered.

2. The great get-out clause in almost all insurance policies is alcohol. Few people realise that if you have consumed alcohol, your insurance company can void your claim whether it be for theft, damage or personal injury. Worse still, policies do not specify the the amount of alcohol that must be consumed and you could find yourself out of pocket after just one drink.

3. Fantasising about galloping through the mountains on horseback on your next overseas holiday? Unless you have made sure your policy allows for it, don't. Horse riding is another so-called "dangerous activity" as far as most insurers are concerned.

4. Insurance cover for delayed baggage is a useful feature of many travel insurance policies. However, few travellers realise that insurers tend to only compensate for baggage that is delayed on the way to the holiday destination. It may seem infuriating but if your bags disappear on an internal flight or on the way home they can't be claimed for.

5. Storm damage is one act of god that insurers will pay for - but don't expect compensation to extend to fences, gates, and hedges. Essentially, anything that is not nailed down - or considered part of the building - is excluded from cover.

6. Forget bicycle insurance if you haven't locked your pedals. Insurers demand "reasonable care" is taken before they will make a payment for stolen bicycles and non-motorised scooters. This means locking the bike - ensuring it is attached to something permanent - or storing it somewhere safe, such as inside a locked home or garage. The rule counts when claiming against a household insurance policy.

7. Don't bother asking your household insurance to pay for damage to your favourite dress damaged in the wash or by a dry cleaner. Damage caused during the cleaning process is generally excluded under home and contents insurance policies. This also applies to furniture restoration and upholstery. One broker's advice was to try suing the dry cleaner instead.

8. When working from home, be aware that your standard household policy may not cover you for theft or accidents which occur there. If setting up a cottage industry from your garage, make sure you talk to your insurer or broker as it is likely you will need an extension to your household policy.

9. Some insurers may refuse to pay out if you have filled your car with the wrong type of fuel. It may sound odd, but insurers consider so-called misfuelling to be a form of "reckless" behaviour when it comes to car damage. Steve Foulsham, of the British Insurance Broker's Association (BIBA) says drivers who quickly park their car and phone their insurer or breakdown company rather than driving off have a better chance of receiving compensation.

10. Most drivers know they must notify their insurer when they have an accident. But did you know that if you are a named driver on another person's policy, the policyholder needs to also notify their insurer when you have an accident? This applies even if the named drive has an accident in another car. Central claims databases record all claims, and insurers can refuse to pay a claim if one of the named drivers on the policy fails to notify the insurer after an accident.

11. When travel insurance policies ask about pre-existing medical conditions most people tend to think of serious and life-threatening illnesses such as heart attacks or strokes. But take a closer look at the insurance policy small print and you will see that most policies fail to define what is a pre-existing medical condition. In fact, if you have ever been diagnosed with high-blood pressure, or have undertaken major surgery you must tell the insurer or risk voiding your policy.

12. Do you know what kind of window and door locks you have at your home? Take a closer look. Most home insurance polices have a clause to say that you should have window and door locks approved by the British Standards Institute (BSI). Many people unfortunate enough to be burgled have subsequently learned their locks are not to standard and they are ineligible to claim.

13. Many people assume their iPod, wallet and designer sunglasses are covered by insurance when they're out and about. But take a closer look at your policy. It is usually the case that valuables outside the home require a personal possessions extension in order to be covered by regular home and contents insurance policies.

14. Most insurers impose a limit on the value of collections they will insure under regular home and contents insurance. For example, valuable stamp collections can be worth hundreds of thousands of pounds and are likely to need separate insurance. One insurer recalls an unsuccessful claim under household contents insurance for the theft of a miniature whisky bottle collection, some of which were valued at o5000 each, that was not separately insured.

15. Insurers will reimburse for the cost of one lost earring, but will not replace the pair. This is because most policies contain a pairs and sets clause which means you are only entitled to replace lost and damaged item and not its pair or set. A more annoying example of this encountered by flood victims occurs where insurance companies agree to compensate for a bottom drawer which has been damaged by water, but then quibble over replacing the entire set.

16. Planning to go away for more than 30 days? Your home and contents insurance may not be valid. Check your policy to make sure you are covered when your home is unoccupied for long periods.

17. Dogs may be man's best friend but they are given short shrift by insurers. Damage caused by pets is excluded under normal home and contents insurance. According to brokers, insurers receive an astounding number of claims relating to hamsters chewing up the carpet.

18. The Y2K threat may be well and truly over now that we are seven years into the new millennium but the insurance companies aren't taking any chances. Date related breakdown - formerly termed the "millennium clause" - remains an exclusion for the cover of electronic equipment including computer hardware and software. But this is not merely an antiquated precaution. Apparently the threat of data related breakdown remains real thanks to palindromic dates (such as 21/11/12) while the year 2010 may yet pose a problem.

19. Insurers usually refuse to cover the theft of vehicle if you have been careless enough to lock your keys in the car.

20. Those who prefer to travel light may find it tempting to store valuables such as cameras in the cargo hold with the bulk of their luggage. But be warned - travel policies may refuse to pay for theft or damage to valuables not kept with you. Be warned: this also applies where valuables are left in a car on a cross Channel ferry.

21. It can be enormously expensive to fix but damage to your home caused by insects and vermin, for example, termites, is historically excluded from buildings insurance.

22. Fancy a sojourn in the Middle East? Thinking of trekking in Afghanistan? Don't expect your travel insurance policy to cover you if war breaks out. Insurers generally steer clear of covering war and terrorism.

23. Insurers will only pay for the cost of removing fallen trees according to home insurance policies if property is damaged when the tree falls.

24. Damage caused to a home after a boisterous party generally won't be reimbursed by your insurer. The same applies to items that are stolen from your home during the party. As a rule of thumb, insurers refuse to pay out if you have had any control whatsoever over the events which lead to the claim.

25. Payment protection is arguably the most exclusion-riddled of all forms of insurance. PPI, which is sold with loans, credit cards and mortgages, covers repayments if people are unable to work due to an accident, illness, or termination of employment. However, most PPI policies do not pay out for the first 30 days. Conditions such as stress and back pain tend not to be included while the self-employed, students and housewives are also not usually covered. The deliberate sale of PPI policies to those unable to claim for them has been the source of outrage from consumer groups due to the wide range of exclusions, and has been the subject of investigation by the Financial Services Authority and the Competition Commission that has resulted in companies being fined for inappropriate selling.

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