You wouldn't go on holiday without your tickets or your passport, but many of us happily set off without travel insurance. Purchasing an adequate travel insurance policy for both ourselves and in the case of dependents, those we are travelling with, can be the most important purchase we make when travelling away from home.
You need to ask yourself, what happens if you fall ill when you are overseas and need medical treatment? Or maybe you have to cancel your holiday in the UK because you are made redundant or a member of your family is taken into hospital. What if the airline goes bust and you can't reach your destination? If you don't have the right insurance cover in place, your dream holiday could turn into a nightmare - with bills running into tens of thousands of pounds. An air ambulance from the east coast of America, for example, can cost £45,000.
Once you have decided you do require travel insurance, you should then ensure you purchase the best type of cover for your individuals needs. This will depend on the type of travel you are about to undertake and the cheapest policy might not necessarily be the best for you.
Read our travel insurance guide to help you to decide what level of cover you should be looking for and ensure you are fully prepared for that dream getaway.
Travel insurance - the basics
Travel insurance premiums can vary a great deal and, whilst it's important that you are getting good value for money, it is equally important that you are choosing the level of cover that suits your needs. Extras can be added on but a basic policy should include the following levels of cover:
Cancellation and curtailment - in case you have to cancel or cut short your holiday, perhaps because you lose your job and can no longer afford to travel, or if a relative falls ill while you are away and you need to come home early. The recommended limit is £3,000, or the total cost of your holiday. Pay attention to the small print, though. If you cancel your holiday because your best friend falls seriously ill, you might reasonably expect the insurance to pay out. But you could be disappointed. Your insurer might refuse the claim if they are not a member of the family, so always check the policy definition of 'close'.
Delay - you should be compensated if your flight is delayed for longer than 12 hours. To avoid any problems in receiving this compensation ask the airline to confirm the delay in writing and keep any receipts of anything you have to purchase due to the delay.
Baggage and belongings - the policy should pay out up to £1,500 if your luggage or personal possessions are lost, damaged or stolen. Many travel insurers also put a limit on the payout for individual valuable items, such as cameras and laptops. The limits vary between insurers but are typically either £250 or £500. If someone steals your cash while you are on holiday, the payout is again usually limited to £250 or £500. To read more about baggage cover click here.
Personal liability - if you injure someone, perhaps on the ski slopes, or you damage their property, they could make a claim against you. It is therefore a good idea to have personal liability cover up to £1m.
Emergency assistance - many insurance companies offer a 24-hour emergency helpline, which can be a lifesaver, particularly if you are in a different time zone.
Medical cover - you don't want to end up with a big medical bill if you are taken ill or have an accident while on holiday. Most experts recommend £2m of medical cover if you are travelling abroad, which should include repatriation in case you need to be flown back to the UK.
Some policies come with more generous limits but you have to ask yourself whether the cover is really necessary. If not, you could be paying over the odds for insurance that you don't need.
Pregnancy shouldn't prevent a holiday, though you will have to check the terms and conditions of your policy. Most travel firms will insure pregnant women, though typically only up until about 24 weeks. You may also be covered if you discover that you are pregnant while you are away and need to cut short your holiday to come home. Read more about travel insurance for pregnant women.
What if I have a pre-existing medical condition?
A standard travel insurance policy is unlikely to cover any pre-existing medical conditions. In other words, if you have asthma and suffer an attack on holiday that requires medical treatment, your policy will not pay out. But you should always declare any health issues when you apply for insurance because failure to disclose any relevant details could invalidate the policy. Some specialist policies will cover pre-existing conditions, though the higher risk of a claim is usually reflected in a higher premium. Visit our pre-existing medical conditions page to find out more.
The pros and cons of a European Health Insurance Card
If you are heading to Europe, you can apply for a European Health Insurance Card (EHIC), which entitles you to medical treatment in state run hospitals in the EU, plus a number of other countries including Iceland and Norway. The EHIC replaced the E111 in 2006 and can be useful in an emergency, but it is not a substitute for insurance. Holders of an EHIC will pay the same cost for their treatment as a local, so if it's free for the country's residents, you will pay nothing. But if the locals pay towards healthcare, you too will have to stump up the cost.
You should also remember that the EHIC usually only covers treatment in state-run hospitals - and in some countries the standard of state hospitals is poor. You will also have to pay any repatriation costs as the card does not include the cost of a flight home if you fall ill or have an accident while on holiday.
The EHIC is free and you can apply online and over the phone (0845 606 2030) If you do need medical care, many travel insurers will waive the excess if you use the card.
How the excess works on a travel insurance policy
It's important to understand how the 'excess' works on your travel insurance policy, so that you don't get caught out. The excess is the amount that the policyholder pays towards any claim. So, if you put in a claim for £500 and the policy excess is £100, the insurer would pay out £400. But some policies charge an excess per section, and the costs can quickly add up. For example, if you were mugged, you could be charged a £75 excess for medical costs, plus a £50 excess for loss of personal effects. Other policies charge just one excess per claim, which can work out much cheaper.
Do I need worldwide cover?
Most insurers cover either Europe or worldwide - and you should always check that you are insured to travel to your destination. Europe-only policies are generally cheaper than worldwide cover and often stretch the boundaries of Europe to include countries such as Egypt, Morocco and Turkey. If you are travelling to America or Canada, make sure it is included on a worldwide policy in case you need to take out specialist insurance.
Annual or single trip travel insurance?
You can buy travel insurance every time you go on holiday, or you can opt for annual multi trip travel insurance, which usually covers any number of trips within a year. If you are a regular traveller, or you are planning a long haul holiday, an annual policy can often work out cheaper. Anyone who takes two or more trips a year, or who is heading for a far flung destination, may save money on their travel insurance if they choose an annual rather than a single trip policy.
It can be the case that levels of cover, particularly for medical expenses, baggage and cancellation tend to be more generous on an annual policy. If you are a frequent traveller it also gives you the flexibility to arrange last-minute trips without having to worry about insurance.
Insurers usually place a limit on the length of your holiday. For example, if you buy a single trip policy, you will typically be covered for a trip that lasts up to 31 days. Some firms insure longer holidays as standard, but you should always read the small print before you travel. If you are planning an extended trip, such as a gap year, you can buy backpackers travel insurance, sometimes known as long stay or even gap year travel insurance. It is usually valid for between three and 18 months and can cover a trip across multiple countries. Read more about backpackers travel insurance.
Family Travel Insurance
It is often cheaper to buy a family policy if you are all travelling with your children. Some insurers also offer free cover for younger children. But check out the excess terms on a family policy. Some firms charge the excess for each family member. So if a family of four had to cancel a trip, they could be stung for four excesses. Read more about family travel insurance.
Winter sports travel insurance
It's important to check for exclusions on your travel insurance policy so you don't get a nasty surprise when it comes to making a claim. Most firms exclude risky activities - and risky could mean common holiday pursuits such as horse riding and scuba diving. If you are planning an adventurous holiday, you can sometimes buy extra cover for risky activities. Or you might choose a specialist policy. Winter sports insurance, for example, is tailor made for skiers and snowboarders, often covering expensive equipment and ski passes. But you still need to read the small print as the terms and conditions vary. Read more about winter sports travel insurance
Adventure travel insurance
Adventure travel is similar to winter sports insurance and covers the more courageous travellers who indulge in the likes of bungee jumping and white water rafting. The premiums are usually higher than for standard cover to reflect the greater risk of claims. But it's often worth the price for the peace of mind.
Travel Insurance for older travellers
Older people often find it difficult to arrange travel cover, even if they are fit and active. Some firms refuse to insure anyone over the age of 65; others charge sky-high premiums - the cost of cover can more than double when you reach 65. Elderly travelers are statistically more likely to make a claim on their travel insurance, but they should not despair. A number of specialist firms cater to older holidaymakers. The policies often include cover for a number of common pre-existing medical conditions and more generous policy limits, particularly for medical claims. Read more about travel insurance for pensioners.
Business travel insurance
Anyone jetting off on a business trip should make sure they have appropriate insurance in place. Standard policies sometimes include business travel, but there are often restrictions, often on manual labour. You might be better with a specialist business travel policy that includes all types of work overseas, plus cover for office equipment such as laptops. There might even be an option to include your golf clubs in case you seal a deal on the golf course.
Cover when disaster strikes
Airline collapse, civil unrest and volcanic ash have all turned the spotlight on travel insurance. Most firms do not cover natural disasters, though you may now find that your policy includes protection against ash clouds, after the eruption in 2010 of the volcano in Iceland wreaked travel chaos.
Riots, terrorism and war can disrupt travel plans, and most insurers suspend cover for travel to affected areas if the Foreign & Commonwealth Office (F&CO) advises against travel to a particular country or region. That means your insurance almost certainly will not pay out for a claim arising in that location, although if you are already in the area when the advice is issued, you will be covered provided you follow any official guidance (although certain exclusions will apply pertaining to the sort of unrest listed above). Check your policy documents for details of your insurer’s approach. If you are determined to travel to an area contrary to F&CO guidance, you may be able to find insurance from a specialist provider.
Read our guide about terrorism travel insurance.
More policyholders are demanding cover in case a travel company goes bust in these tough economic times. If you book a package holiday through a licensed tour operator, you will normally be covered by the Civil Aviation Authority ATOL protection scheme. But many people nowadays don't book a package holiday. Instead they might book flights over the internet and then search for suitable accommodation. Many policies therefore offer scheduled airline failure insurance and end supplier failure. You are then protected if the airline, villa company, or ferry firm goes bust after you have booked the holiday.
Strike cover is another useful add-on because it insures the policyholder if their holiday is delayed or cancelled as a result of industrial action.
Do you have existing cover?
If you are thinking of buying travel insurance, you should first check any existing cover. For example, your home contents policy might include insurance for your personal possessions when you are away from home. If so, you don't necessarily need baggage cover on your travel policy, so could save some money on the premium.
A number of premium bank accounts and credit cards also include travel insurance. But check the level of benefits because the 'free' cover might also be very basic. And beware packages that include free travel accident insurance, which normally only covers serious injury in an accident. It does not pay out if the policyholder needs any medical treatment if they are ill, or for loss of baggage, cancellation or curtailment.
Where to buy travel insurance
Your travel agent will often try to sell you insurance when you arrange your holiday. If you are booking a ticket with a low cost airline or online travel firm, you will also often be asked if you require insurance. It might be convenient to buy a travel policy with your plane ticket, but it is often more expensive. You might also find that the cover is inadequate for your needs so it's always a good idea to compare a number of policies before making a decision.
MoneySupermarket.com is a great way to compare travel insurance quotes and find the best policy at the best price for you. Our free independent service includes details of more than 450 travel policies from a variety of UK insurers. Avoid leaving it to the last minute to buy travel insurance, otherwise you won't have cover in place in the unfortunate event that you have to cancel the trip.
Useful Travel Tips
Be responsible - Take care of your belongings while you are on holiday. If you leave your bag unattended, for example, the firm can justifiably turn down a claim for theft. Many insurers also ask for a police report of any crime. And we all like to have a drink on holiday, but don't get too carried away. Insurers often refuse to pay claims if you were drunk or under the influence of drugs.
Plan your travel money in advance - Leaving the purchasing of your travel money until the last minute can leave you out of pocket. The Bureau De Change at airports usually will leave you paying significantly more for your money than buying your cash online. Also pre-paid cards are a great alternative to cash. They often offer competitive exchange rates whilst not incurring any additional costs associated with using debit and credit cards overseas.
Check your passport and visa deadlines - Before travelling always make sure that your passport is valid for six months after the date you plan to return to the UK. Always check if the destinations you are travelling to require a visa, these can take a few weeks to arrange so you will need to do this as early as possible to avoid any possible disruption to your travel plans.
Driving overseas - If you intend to drive whilst overseas you can use your UK licence for driving if you are in a European Community/EEA member state. However all countries are different so it's always worth checking age and other restrictions before you go to avoid any disruptions to your plans. An International Driving Permit (IDP) translates your driving licence into several other languages and some countries will insist on this document before allowing you to drive on their soil.
If you are ready to begin comparing travel insurance quotes, please hit the 'get a quote now' button above or click on the link below to start your search.