The outbreak of Swine flu in Mexico, with around 10,000 Brits holidaying there at the time, showed how vital it is to cover medical expenses while overseas as treatment and repatriation costs quickly mount up. The epidemic has also forced many holidaymakers to make claims for refunds as they cancel their trips - without travel insurance they would be out of pocket. For advice on what to do if your holiday is affected by the outbreak read Clare Francis' article
"Swine flu - your questions answered".
It isn't just in such an extreme instance where travel insurance can be important, however. In April, thousands of customers with online travel agency Freedom Direct were hit as the firm collapsed - and this is on the back of similar failings by Zoom and XL that left many travellers stranded.
What does travel insurance cover?
A comprehensive travel insurance policy will cover medical expenses as well as repatriation back to the UK; personal liability; cancellation; baggage; and cash. Normally with insurance the more cover you have the better, but do watch out because many insurers set their policy limits ridiculously high and charge you for it - for example, medical expenses can be set at £20million when £2million is nearly always enough. At moneysupermarket.com we recommend the following policy limits:
- Medical expenses (£2m)
- Personal liability (£1m)
- Cancellation (£3,000)
- Baggage (£1,500)
- Cash (£250)
Remember to read the fine print of the document too. Many policies with baggage cover, for example, have single item limits typically in the region of £200-£300. Also look at the start date of the policy. Make sure you take out insurance as soon as you book your trip - leave it until the last minute and you might not be covered if you need to make a cancellation.
Another feature to look out for is scheduled airline failure (SAF) cover - this protects you if a company goes bust forcing you to cancel your trip. Normal cancellation cover will not protect you in this scenario and only around 10% of insurers carry this protection in their policies so you may have to pay a little extra for it. With package holidays however, you have nothing to worry about provided your agent is registered with ATOL as you're entitled to a full refund anyway.
Which type of cover is right for you?
There are two types of travel insurance, both of which can provide value for money depending on your circumstances. These are:
- Annual multi-trip travel insurance: Covers all trips during a year for a one-off fee although there is normally a limit set to the number of days you can be away per year, typically 30-60 days.
- Single trip travel insurance: Does exactly what it says on the tin - offers cover for one trip.
Single trip travel insurance is much cheaper than an annual policy. However, the key is to assess how long you'll be away for and how many trips you're likely to make during the course of the year to work out if an annual policy could offer better value.
As a general rule, if you go away more than two times a year an annual policy is the best option. Annual policies also generally offer better value for one-off trips to the USA because of the high medical costs in the country. Annual policies are calculated on average trip demographics meaning those heading to the US are effectively subsidised by those travelling to cheaper countries.
It could also be possible to benefit from a specialist policy. Several insurers offer unique policies for families, over 65s, gap year travellers and those with pre-existing conditions. Winter sports insurance is an optional extra on many policies but you may wish to take out a specialist deal if you're a ski or snowboard enthusiast. The key is to shop around and think about what's right for your trip when you buy.
How can you find a good deal?
A mistake many people make is to book travel insurance alongside their holiday with a travel agent. Unfortunately, many travel agents make more money from their insurance policies than they do from the holidays themselves so booking a policy this way could be an expensive mistake.
Stand-alone insurers can offer much more affordable deals and you can compare their prices with our comparison tool. For example, a 27-year-old male spending two weeks in Spain this June could pick up a policy for as little as £5.51 through Cheaper Travel Insurance and still have enough cover to meet all of our recommended policy limits.
Here are some additional tips to ensure your holiday runs smoothly:
- Take out an EHIC - The European Health Insurance Card (EHIC) is free and entitles the holder to free or discounted medical treatment in any EU country and Switzerland. It's not an alternative to travel insurance but it is useful in helping you get the treatment you need. Check out our EHIC guide for more information.
- European only cover - If you know you're unlikely to travel further afield then take out European cover rather than worldwide cover to make substantial savings.
- Buy with a credit card - Credit card transactions between £100 and £30,000 are covered by Section 75 of the Consumer Credit Act which means you can make a claim for any losses against the card issuer as well as the retailer. So book your holiday with a credit card for additional protection as long as you know you can clear the balance at the end of the month and won't get hit with interest charges.
- Don't trust credit card insurance - Credit card travel insurance is often only travel accident insurance meaning it covers accidents while you're on the move in a car or on the train, but it is not holiday cover. So if you pick up travel insurance as a freebie make sure it's giving you the cover you need.
- Make sure there's a 24hr helpline - Given the time differences, having a 24hr helpline to call when you're overseas can be crucial so note that number down before you travel.
Rate This Article
Click on a star to rate this article.
