Peter Gerrard, Insurance Expert
The strength of the euro has reached its highest mark against the pound since its introduction in 1999 - smashing through the 80p barrier - and the weakness of sterling has made many people think twice about their holiday plans this year.
According to a poll of moneysupermarket.com users, nearly a third of us (29%) are considering travelling outside Europe because of the poor exchange rate, while one in six (17%) are thinking about putting their plans on hold altogether and staying at home.
Though a significant proportion of holidaymakers are still looking to Europe this summer, the recent warm weather here may tempt many to stay on home shores. Others may consider flying further afield, because while the pound is weak against the euro, it is strong against other currencies, particularly the US dollar. You can still get more than 1.9 dollars to the pound.
Wherever you decide to holiday this year, you need to ensure you have suitable travel insurance in place - even if you end up going somewhere here in Britain.
Competition in the travel insurance market is rampant and as such, policies are competitive wherever you travel - as long as you remember to shop around with a comparison website rather than simply accept travel insurance at an inflated price as an add-on to a flight or package holiday.
While the cost of most things seems to be rising at the moment, travel insurance has actually fallen in price over the past 12 months according to Defaqto, an independent research group. For example, a family taking a 17day holiday in Europe can now pick up a policy for 7% less on average than in 2007 - down from £49.47 to £45.99.
The differences between European and worldwide cover
In fact the only country for which travel insurance is now more expensive this year compared to last is the USA, where annual travel cover has increased by 2.3% for couples and families.
One of the reasons travel insurance is more expensive if you're heading off to the US is because of the high cost of medical cover - for example, a hip fracture on American soil could set you back as much as £22,500. Repatriation costs back home could then add another £50,000 to the bill.
In addition, when travelling anywhere outside Europe you do not have the advantage of carrying the European Health Insurance Card (EHIC) which offers state-provided medical cover in the country you are visiting.
Consequently, it's crucial to closely examine the level of medical cover you pick up with a travel insurance policy. You should travel with at least £2m worth of cover, but examine the terms and conditions of each policy thoroughly before applying in case there are exclusions - particularly if you have a pre-existing condition. It's also well worth checking the Foreign & Commonwealth Office (FCO) website for each country you plan to visit in case there are specific requirements they may need, such as injections - if you don't meet these requirements you may invalidate your policy.
Thankfully, travelling further overseas needn't cost the earth. Whereas a family of four spending two weeks in France could pick up a policy for as little as £13.65 through provider Top Dog, the same family could enjoy the peace of mind of travel insurance in the USA for just £29.80 with Columbus Direct. This includes £10m worth of medical cover, £2m personal liability cover, £3,000 cancellation cover and £2,000 of baggage cover.
Why you still need travel insurance in the UK
If you're planning to stay at home, it is still wise to make sure you have the right level of travel insurance.
Of course, the National Health Service means that medical costs needn't be of too much concern although it's still worth gaining suitable cover for repatriation costs and burials should the worst happen. You're also just as likely to be the cause of an accident involving someone else at home as you are abroad - personal liability cover could be crucial if legal action is necessary. It's also well worth taking out travel insurance in the UK if you plan to take part in any dangerous activities.
Check the individual limits on items. You may be covered for some of the items you take with you - such as laptops, MP3 players, etc - in your home insurance policy. However, some home insurance policies will not cover you for items taken out of the home and even if your policy does offer suitable coverage you may prefer to make a claim on a travel insurance policy instead to avoid losing a no claims discount.
Travel insurance for British travellers in the UK is typically cheap. A 25-year-old male could pick up a policy for as little as £5.44 for a week in France with Cheaper Travel and enjoy cover up to £10m for medical expenses, £2m on personal liability, £3,000 on cancellation cover and £1,500 worth of baggage cover.
Go for an annual policy
Another option is to go for an annual multi trip policy as this will cover you for holidays both home and abroad. If you are planning to stick with a European holiday this year, despite the weak pound, then a family of four could get an annual European policy for as little as £36.80 from Flexicover Direct. This is an exclusive deal available only through moneysupermarket.com. For just 10p more, this could be upgraded to premier cover which offers £1,500 of baggage cover, as opposed to £1,000 with the standard policy, and £3,000 of cancellation cover rather than the £1,000 offered as part of the standard insurance.
If that protection is not enough, Columbus Direct is offering £5,000 of cancellation cover and £3,000 baggage cover for just £36.95. Again, this deal is only available through moneysupermarket.com.
Even if you are planning to travel further afield, your insurance won't be much more expensive. Flexicover Direct's standard worldwide annual policy would cost a family of four just £40, while its Premier cover would set you back £41.50. And Columbus Direct's worldwide policy is £42.50. These aren't the only providers offering cover for this sort of price - Marcus Hearn, Top Dog, Insurefor and Club Direct are other insurers worth considering. Many of their best rates are exclusive to Moneysupermarket, so it's well worth checking out our comparison service to ensure you get the best value for money.
As well as shopping around for insurance, don't forget to see if there are any other savings you can make when planning a holiday - by using comparison tools to search for flights, hotels, car hire and even airport parking, you could knock tens, and even hundreds of pounds off the total cost of your trip.
Have your say: Have you ever had a holiday disaster and been glad that your insurance covered you? Or maybe you went away without insurance and learnt the hard way about how important it is. Whatever your story, visit our community forum and let us know.
Disclaimer: Please note that any rates or deals mentioned in this article were available at the time of writing.
Relevant Links
