While none of us want to think about things that could go wrong in the time between booking and jetting off – for example illness, bereavement or redundancy - taking out a policy early could potentially save you thousands and offer you peace of mind.
Here we take a look at why you should purchase travel insurance with cancellation cover as soon as you book your holiday.
Taking out travel insurance when you book your holiday will not cost you a penny more, yet as long as you’ve ensured cancellation is included, you’ll be protected from the minute you’ve bought it.
It is easy to assume that you are automatically covered for various eventualities, but it is vital when choosing your policy that you check exactly what you are getting for your money as policies can vary considerably.
For example, it may be that you’ve booked a holiday such as a skiing or an activity break and you end up sustaining an injury before you go. Your holiday is dependent on you being in good health, yet without cancellation cover you face losing up to 100% of the value of your holiday.
This is why it really is essential to plan for the unexpected and make sure you are covered. Going for the cheapest insurance may be tempting but a couple of extra pounds now could potentially result in you making huge savings in the long run.
For example, we found a single-trip policy to Spain without cancellation or baggage cover for £5.20. Adding these on brought the policy up to just £5.78.
However, the amount insurers are willing to pay out were you to cancel your trip also varies significantly with amounts ranging from £500 up to £3,000.
Therefore, do your homework and make sure the cancellation cover is equal to or greater than the price of your trip.
While most will cover unexpected events like redundancy, illness etc, they are unlikely to cover something you knew was likely to happen ahead of your holiday. It is crucial that you always read the small print of any insurance policy.
Also remember to check how much excess you would have to pay were you to claim for cancellation. This generally starts at around £50 and goes up to £300.
What if something goes wrong with the company I have booked with?
On the other side of the coin, you need to make sure if your holiday were to be either cancelled or disrupted because of issues with your travel company, you wouldn’t lose your money.
The past few years have seen a number of holiday companies and airlines going bust, leaving families stranded miles from home or losing their holiday and their money. And recently we have seen the cancellation of holidays due to political problems like those in Egypt.
You may think that all holidays booked with a big company are ATOL protected and you are automatically covered.
However, be aware this only protects holidays that have been booked as a package so if you have made your own separate travel and accommodation arrangements, you will not fall under this.
If this is the case, taking out insurance with end supplier failure would be a wise move. This will not only ensure that you get a full refund if your airline or accommodation provider goes bust before you leave, it will also help to cover the cost of any arrangements you need to make if this happens while you are away, such as booking a return flight.
A further tip to make sure you have payment protection would be to pay with a credit card, as under the Consumer Credit Directive you are entitled to a full refund for purchases of between £100 and £30,000.
If you have paid with a Visa/Mastercard debit card, under chargeback regulations you can claim your money back irrespective of the amount.
No one can control the elements, so what if a natural disaster such as a tsunami or hurricane was to strike in your holiday destination days before you were due to travel? Clearly, you would not be able to go and your holiday would be cancelled.
While your flights would be covered under EU guidelines there’s a good chance your accommodation wouldn’t. All the more reason to make sure that your policy is fully comprehensive and protects you against disasters such as these.
Finding the best travel insurance deal
When comparing travel insurance policies, the best advice is to take some time to work out exactly what level of cover you need and don’t let a couple of pounds now mean you are left under-insured when it really counts.
MoneySupermarket’s travel insurance channel will allow you to compare policies from a number of providers side by side and find the right policy for your needs.
And don’t leave it until the last minute – booking in advance won’t cost you any more, yet you’ll be thanking your lucky stars if the unexpected happens and your holiday has to be cancelled.
Please note: Any rates or deals mentioned in this article were available at the time of writing.