You wouldn’t dream of heading off on your holiday without a passport or your plane tickets, but what about travel insurance?
It’s amazing how many people don’t bother taking out travel insurance when they go away.
But do you really need insurance for your holiday?
This article looks at how travel insurance works and how you can get the cover you need without spending a fortune.
NOTE: This article is written with the view that you’re living full-time in the U.K.
What is travel insurance?
Basically, travel insurance is intended to cover you for any losses that you incur while you’re travelling either abroad or in the U.K.
If you travel without insurance, you could end up massively out of pocket or even stranded somewhere if something unexpected happens.
What does travel insurance cost?
The cost of insurance for your holiday varies tremendously, depending on your personal circumstances, the nature of your trip, the level of cover you need, and the country or countries you’re visiting while you’re on holiday.
Generally, if you travel alone, you’ll pay more than if you travel in a group. If you’re over 65, have a pre-existing health condition, or you’re pregnant, you may be refused insurance cover or offered a very limited specialist policy that’s pretty expensive.
If you plan on taking part in any risky activities or extreme sports, such as climbing, skiing, or horse riding, you may need additional cover or a specialist policy, and that will carry a higher premium than a standard travel insurance policy for a sightseeing or beach holiday.
What does standard travel insurance cover?
There are a number of bog-standard clauses that most travel insurance policies cover:
Travel insurance generally covers either Europe only, which is cheaper, or worldwide. So, check that your policy covers your destination(s) before you travel.
Cancellation and curtailment
The cancellation and curtailment clause of a travel insurance policy covers you if your holiday has to be cancelled or cut short due to unforeseen circumstances that were beyond your control.
Most policies cover you for holiday cancellation or curtailment due to bereavement or severe illness. However, the reason for cancellation or curtailment of the holiday must relate directly to you or to a “close relative.”
If your flight is delayed by more than 12 hours, you should receive compensation under your travel insurance policy, although do make sure to check the specified time set out in your policy.
Baggage and belongings
Travel insurance covers your luggage and valuables up to a limit for certain items such as laptops, jewellery, cameras, etc. if your luggage is lost, stolen, or damaged.
If you are unfortunate enough to be mugged or robbed of your cash, the typical payout is up to £500.
It’s usually recommended that you take out personal liability cover of at least £1m in case you injure someone or damage their property while you’re on holiday.
Most good insurance companies provide a 24-hour emergency helpline that you can contact if you need assistance.
This is essential, especially if you are holidaying in a different time zone from that in the U.K.
You should never travel abroad without medical insurance cover.
In many overseas countries, you don’t get free medical treatment; you have to pay for it. If you fall seriously ill or have an accident, you could finish up with a huge bill for medical treatment that you can’t pay.
Most insurance companies recommend that you take out at least £2m in medical cover, which should include repatriation in the event that you need to be flown home.
If you or one of your party is pregnant, double-check that’s covered by the insurance policy; you may have to take out additional cover if you’re flying.
Specialist travel insurance
So, that’s what a basic travel insurance policy covers. However, depending on your circumstances or the nature of your holiday, you may need to take out specialist cover.
Many standard travel policies don’t cover you if you’re over 65, as you’re deemed to be at a higher risk of accident or illness than younger travellers. However, specialist policies are available for older travellers at a higher premium.
Pre-existing medical conditions
Standard travel insurance does not cover pre-existing medical conditions.
If you do have an existing health condition, you must declare it when you apply for travel insurance. If you fail to do so, the policy will be invalid and won’t pay out in the event of a claim.
Some health conditions can be covered under a separate policy, which will cost you more. However, if you’re seriously ill, for example with a severe heart condition or advanced cancer, most companies won’t insure you.
If you’re going on an adventure holiday where you’re planning on going skiing, white water rafting, or scuba diving, for example, you will need special insurance cover specifically for those activities, as well as the basic travel insurance cover outlined above.
Standard insurance policies sometimes include business travel. However, if you travel with specialist equipment, computers, or safety clothing that you need for your job, you may prefer to take out specialist business cover.
Most travel insurance policies have a disaster cover component. That cover insures you in the event that riots, terrorism, or civil unrest cause you to cancel or curtail your holiday for safety reasons, particularly if the Foreign Office has pre-warned about problems in certain locations.
However, you most likely won’t be covered for natural disasters such as fires, floods, earthquakes, or tsunamis. In the current climate, check to see if outbreaks of disease and the consequent restrictions are covered before you travel.
The majority of travel insurance policies will cover you if your airline or travel agent goes out of business.
How does the excess work on a travel insurance policy?
Many insurance providers charge excess per section on a travel insurance policy. For example, if you were mugged in the street and your watch and jewellery were stolen, you might be required to pay £75 excess toward medical bills and a further £50 excess for the loss of your watch and jewellery.
However, some insurance providers only make one excess charge per claim, which will probably work out cheaper if you have to make a claim. So, before you sign up for a travel insurance policy, check the rules regarding excess charges.
Annual or single trip travel insurance?
If you’re a seasoned traveller who takes several trips abroad or in the U.K. every year, it may work out cheaper to take out an annual travel insurance policy that covers you for multiple trips in one year.
Often, the levels of cover that you get with an annual travel insurance policy are more generous, too.
Are you already covered?
If you only intend to travel in the U.K., it’s worth checking to see if you already have cover under your home insurance policy. Home insurance often covers the loss of certain items, including jewellery, phones, and the like, and you don’t want to pay for that cover twice!
Many credit cards and bank accounts include some travel cover as part of their accountholder package. However, that cover is usually pretty basic, so double-check the small print before you decide that you don’t need separate travel insurance.
Where can you buy travel insurance?
You can often find the best travel insurance deal that’s tailored to your needs by shopping online via one of the many comparison websites.
Alternatively, you can buy travel insurance at the Post Office, your travel agent, and most major insurance providers.
Don’t assume that “it won’t happen to me.” Your whole holiday could be ruined if something goes wrong and you’re not insured.
If you’re heading off on holiday or for a camping adventure at home or abroad, take out travel insurance that covers you for everything you need. The cost of the policy is minimal compared to the peace of mind it’ll buy you!
P.S. Always make sure that you read your policy fully and understand what is covered, what is not covered, and what circumstances would prevent the insurer from paying out in the event of a claim.
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