Insurers will not cover T5 losses

14 April 2008

British Airways boycotted by travel insurers

Private travel insurance policies will not cover the thousands of passengers putting in claims for lost luggage and missed holidays after trying to fly from Heathrow’s Terminal 5.

The move came as British Airways (BA) had no other choice but to postpone its plans to move the remainder of long haul flights to T5 on April 30. The transfer is now not expected to occur until June.

The chief executive of BA, Willie Walsh, admitted on Friday that doubling the number of passengers using T5 from 40,000 to 80,000 daily was an “unnecessary risk”.

Additionally, it has been claimed that thousands of those bags lost since the launch of T5 last month face incineration if they are not reunited with their owners.

Since opening on March 27, 20,000 pieces of luggage have been lost or mislaid and 693 of the 5,277 flights in and out of T5 have been cancelled.

Milan’s Onboard Express, which has a £5m a year contract with BA to return luggage travellers, is currently trying to reunite 5,000 lost bags with their owners.

Giovanni Tinelli, of the firm, said: “All our BA bags that are untraceable are sent back to BA and then they are destroyed in an incinerator.”

Direct Line was the insurer leading the boycott confirming last week that it would not be compensating those passengers flying from T5.

“You wouldn’t expect insurance against a car that you knew was going to crash, and the same applies to T5,” said a Direct Line spokesman.

“People are by now aware of the problems there, and if they choose to use the terminal then they cannot expect to be covered.”

According to experts in the insurance industry, other insurers are expected to follow Direct Line’s lead.

Malcolm Tarling, of the Association of British Insurers, said: “They are taking a position which is entirely logical as respects the insurance market.”

“Insurance is there to cover you for unforeseen events. Clearly, it cannot be argued that problems experienced with T5, in terms of lost luggage and missed flights, are unforeseen.”

AXA, Royal Sun Alliance and Norwich Union have all said they would be dealing with claims according to standard procedures.

A Norwich Union Spokesman said: “We are not about to employ a special policy against T5 – we look at every case on its merits.”

However, Direct Line disagreed saying that passengers who bought insurance form other insurers would indeed be affected.

“This is not targeted against British Airways, but rather against an existing and on-going problem. In essence nothing has changed in terms of policies,” said Jake Hatton of Direct Line.

“We will still look at each claim on a case by case basis. But we will not be covering risks such as travel delay, trip abandonment, delayed and lost luggage and missed departure at T5 for people who have taken out policies after the start of the problems.

“We have talked with other insurers and, despite what they may be saying publicly, they have told us that they will be adopting exactly the same approach.”

He added that this policy would continue until T5 reached a “period of trouble-free operation”.