Page last updated at 11:26 GMT, Tuesday, 15 April 2008 12:26 UK

Terminal 5 insurance cover cut

Disgruntled passenger at Terminal 5
Some passengers may find they cannot claim on their recent cover

Some insurers have stopped offering cover for lost luggage or delayed flights to travellers going through Terminal 5 at Heathrow.

Huge problems with baggage handling led to thousands of items being delayed when the terminal opened.

People who bought travel insurance before the problems started will still be able to make claims.

But insurance bought since then may not pay out for delayed or cancelled flights, or lost or delayed luggage.

"We cannot insure for events that have already happened," explained a spokeswoman for Direct Line, one of the insurance firms that have taken this stance.

"Insurance only covers events that the customer is not aware of at the time of purchase.

"People calling up on our travel insurance quote line were told this specifically," she added.

No more delays

Direct Line said it was in continuous contact with British Airways and would restore the cover to new policies once the terminal, which opened on 27 March, is working properly.

Norwich Union are not making any changes to exclude claims from customers who travel from Terminal 5
Norwich Union

At the moment no more flights are being delayed and the backlog of bags at Heathrow has now been cleared, although some bags are still on their way back to their owners.

But last Friday British Airways, which will have exclusive use of the new terminal, decided to delay until June moving most of its long-haul flights there.

Not all insurers are excluding Terminal 5 losses and delays from their recently sold policies.

Norwich Union said it would still offer travellers the same level of cover as before.

"Norwich Union are not making any changes to exclude claims from customers who travel from Terminal 5," said its travel claims manager, Paul Wells.

"This includes those who are buying travel insurance through us now and in the future," he added.


Other insurers restricting their cover for Terminal 5 users are the Royal Bank of Scotland and Churchill - both part of the same group as Direct Line - and Tesco.

Direct Line said it had already paid out thousands of pounds on many claims it had received from travellers going through Terminal 5.

Even if someone cannot get the cover they would like, this does not mean they will be left to bear all the cost of lost luggage or cancelled flights

The Association of British Insurers (ABI) pointed out that an international agreement makes airlines the first point of contact for compensation.

"You are entitled to compensation under the Montréal Convention if your luggage is lost damaged or delayed," said Malcolm Tarling of the ABI.

"Airlines, in this case BA, are also the first port of call for delayed or cancelled flights," he added.

British Airways has already admitted losing £16m due to the delays.

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