Everything you need to know about travel insurance

Travel insurance is designed to protect you financially if you have to cancel your holiday, run up medical bills, or if your belongings are stolen, damaged or lost while you’re away.

Policies bought now generally provide protection against Coronavirus, so that if you contract the illness whilst you’re on holiday you should be covered for both medical treatment and getting back to the UK. Similarly, if you take out insurance but are diagnosed with Coronavirus before you’re due to travel, your cancellation costs should be covered. Make sure you check the small print of the policy you’re considering buying to check exactly where you’d stand if Coronavirus impacts your travel plans. Remember too that your travel insurance will only cover you if you’re not travelling against the advice of the Foreign Commonwealth and Development Office (FCDO).

When you book a holiday, be it a package holiday or a flight on its own, you’ll usually be offered insurance provided by the travel company you’re booking with. This tends to be more expensive than buying cover independently, so remember to always shop around and check quotes from a range of different insurers before you buy.

Here, we explain everything you need to know about travel insurance.

What does travel insurance cover?

There are hundreds of travel insurance policies available to buy but it’s important to pick one which gives you full cover for the type of holiday you have booked.

You’re covered from the moment you buy the policy, so as soon as you book a trip it’s worth buying insurance if you don’t have it already. Here we’ve listed the major areas a policy will cover you for.

Medical cover

This is arguably the most important protection your travel insurance provides so check the cover limit carefully as this will tell you how much an insurance company will pay towards medical costs. Ideally you should look for cover of at least £1m if you’re travelling in Europe, and £2m if you’re travelling outside Europe.

This might sound like a vast sum, but most countries require you to pay for medical care, and costs can quickly run into tens of thousands of pounds for even a short period of treatment in some countries such as the United States of America.

With insurance you’ll be covered for any medical care you need which is listed on the policy.

Bear in mind that these policies are designed to pay for things you aren’t expecting to happen. Therefore if you have pre-existing conditions you need to tell your insurer about them when you buy the policy, or as soon as you discover them. If you don’t and you fall ill or have an accident related to a condition you already knew about, your policy will be invalidated.

Holiday cancellations

Another important area of any travel insurance policy is how much it will pay out in the event you have to cancel your holiday. Make sure that you have enough cover to pay for your holiday in full if you’re not able to go on it.

If you’re cancelling the holiday it needs to be for a specific reason, and you can’t claim on your travel insurance policy if you just decide not to go. Instead it needs to be a reason such as a close family death or being made redundant. Your policy should also pay out if your holiday has to be cancelled because the travel company has gone into administration.

Travel delays

If your flight is delayed or you’re stranded because of bad weather or a strike, you may be covered under your travel insurance.

It’s important to check the policy wording carefully though, as often insurers may expect you to ask for a refund, or compensation from the travel provider first. Some will also only allow you to claim for specific reasons, which should be listed in the policy wording.

You can also currently use the EU flight delay compensation scheme if your flight is delayed for more than three hours if it’s the airline’s fault. This applies to EU flights, taking off or landing in EU airports, and up to £520 is available if your claim is successful.

Lost, stolen, or damaged belongings

If your flight is delayed or you’re stranded because of bad weather or a strike, you may be covered under your travel insurance.

It’s important to check the policy wording carefully though, as often insurers may expect you to ask for a refund, or compensation from the travel provider first. Some will also only allow you to claim for specific reasons, which should be listed in the policy wording.

You can also currently use the EU flight delay compensation scheme if your flight is delayed for more than three hours if it’s the airline’s fault. This applies to EU flights, taking off or landing in EU airports, and up to £520 is available if your claim is successful.

Personal liability

Most insurers include personal liability cover of around £2m as standard. This will cover you if you accidentally harm someone else or their possessions while on holiday, for example if you trip and hurt someone, or knock their phone into the swimming pool.

What do I need to watch out for in my policy?

Not all insurance policies are the same, so you’ll need to read the small print carefully before buying. The last thing you want is to pay for a policy and then discover it doesn’t cover everything you thought it did. Here are some points to consider:

Check which countries are included

You can buy an insurance policy to cover specific areas, or a worldwide version which covers all countries. For example, if you’re just travelling to France a policy covering Europe would cover you, but if you were off to Canada or the US you’d need a worldwide policy covering these countries.

In some cases, a policy which is described as ‘worldwide’ might exclude some areas – such as the US, Canada, or Mexico, so you’ll need to make sure any policy you buy definitely covers the country or countries you’re visiting.

Some ‘European’ policies meanwhile, will cover countries outside Europe, such as Morocco so it’s always worth checking before you buy.

You might need insurance even if you stay in the UK

If you’re staying in the UK for a holiday you might assume you don’t need travel insurance as you’ll be entitled to free health care with the NHS (at the point of service). However, having cover can provide valuable peace of mind that you’ll be protected if your holiday has to be cancelled, or you lose your baggage or have holiday cash stolen. There are often some restrictions on these policies – for example, you may need to pre-book your accommodation, be a certain number of miles away from home, or be staying away for at least two nights.

You may already have some cover under your home insurance policy for your belongings. For example, if your contents policy includes personal possessions cover, any items you take outside of the house, such as on holiday, should be protected if they’re stolen, damaged, or lost.

Check the policy wording carefully before buying so you can be certain it provides you with enough cover. If you have an annual policy you may already be covered for any UK trips you’re planning so it’s often only worth considering if you don’t have any insurance in place.

You may already have insurance with your current account

If you have a packaged bank account which you pay a monthly fee for, travel insurance might be included as part of the deal. Lots of these accounts come with travel cover, so if yours does, just double check it will cover the kind of trip you’re going on.

Cruise trips usually require specialist cruise insurance

If you’re planning to book a cruise, you will need to buy a specialist policy as standard travel policies won’t usually cover things like itinerary changes or missed port departures. The medical facilities onboard won’t be the same as in a hospital, and if there is a severe accident the passenger may need to be airlifted to the nearest hospital. All of these things cost insurers more money, which is why cruises aren’t generally covered by standard travel insurance. Cruise policies also often include a higher level of cancellation cover than other travel insurance policies, as cruises tend to be an expensive type of holiday.

Insurance won’t cover out-of-date passports or forgotten visas

Different countries around the world have different rules on how long you need to have left on your passport before you are allowed in. If you arrive at one and your passport is due to expire soon, or you haven’t got the right kind of visa to be allowed into the country, you won’t be able to claim on your insurance.

When you book your trip check the Foreign and Commonwealth Office (FCO) website, as this will give you the most up-to-date information on the countries you’re visiting. It’s also worth checking it before you travel.

If you’re planning to go to a country that the FCO has warned against visiting, your insurance won’t cover you – although if they advise against travelling there after you’ve booked your holiday, you may be able to cancel the trip and claim on your insurance.

An annual policy doesn’t mean unlimited travel

Most annual travel insurance policies will cover any number of trips within a year, but there are limits on the amount of days you can be away for. Most policies stipulate that each holiday must be no longer than 30 days, although this will depend on the insurer.

If you’ve got a longer trip planned, a career break for example, there are specialist longer-term travel insurance policies available. You can find and compare long-stay travel policies via comparison sites such as Gocompare.com, Travelsupermarket.com, and Comparethemarket.com.

Not all activities are included

If you’re planning to take part in something a little more adventurous when you’re on holiday – such as a jet ski excursion or off-piste skiing – this may not be covered by your travel insurance. Always check the wording of the policy first, and if it doesn’t cover the activity you want to do, you may be able to buy a specialist policy that will cover extreme sports from providers such as Globelink Travel Insurance, Protectivity, or Cover-more UK.

If you’re taken to a private hospital you might not be covered

In some instances, travellers who are taken ill or have an accident are taken to private, rather than state-run hospitals. This depends on the country as in some areas there are only private hospitals, but in countries where there are both, there have been reports of travellers being taken for private medical treatment and then not being able to claim on their insurance.

Double check your policy small print before you leave to see what your insurer will cover. If it’s an emergency and you’re not able to choose which hospital you’re going to, hopefully your claim will be accepted. However, as with lots of areas of insurance it depends on the insurer in question and the individual circumstances, so if you do need treatment while you’re away, contact your insurer as soon as possible to see if your costs will be covered.

The GHIC isn’t a replacement for insurance

It’s a common misconception that having a GHIC – the free Global Health Insurance Card – will act as travel insurance when you’re in away. It won’t cover you for things like cancellation costs, repatriation or lost or stolen baggage or possessions.

Instead what it does is give you access to medical treatment in the country you’re visiting at the same cost as a local person would pay. This can be a massive benefit as it means you won’t be forced to pay high costs for private medical treatment, and if there is a state-run medical facility you will be able to access it, and pay the same charges as locals would.

The card applies to EU countries. It is free to apply for but there are lots of copycat websites which will try and charge you for getting one. You can apply for a Global Health Insurance card on the official NHS website here. It usually takes between seven and 10 days to get your card through once you have applied for it. Learn more about how the GHIC works in our article Everything you need to know about the Global Health Insurance Card.

How do I actually make a claim on my travel insurance?

When it comes to making a claim with your travel insurance, how you do it will depend on your insurer but most require you to do the following:

  1. Contact your insurer as soon as you need to make a claim. No matter what it’s for, be it medical costs or a lost camera, your insurer can tell you what you need to do next.
  2. When you speak to your insurer, ask about the claims process, often if you’re still on holiday it will tell you on the phone, or via email, whether your claim is likely to be accepted.
  3. For theft you may need to get a police report and there is often a time limit for doing this. Again, your insurer should tell you what you need to do, or it may include this information on the website.
  4. If your luggage has gone missing, or hasn’t turned up on time, and you’ve had to buy replacement items, make sure you keep receipts for these. Your insurer will ask to see these if you submit a claim to recoup the costs.

If your claim is rejected

If you make a claim to your insurer and it’s rejected, you can complain. Most insurers have their own complaints procedure so check what yours specifies. Usually you’ll need to make a complaint directly to the insurer first and give it time to try to resolve the problem.

After eight weeks if you’ve not heard back from them, or you’re not happy with their response, you can escalate your complaint to the Financial Ombudsman Service (FOS). The service is free to use and independent and will look into the complaint on your behalf. If it finds in your favour it can order the insurer to rectify the situation, and in some cases reimburse you if you’ve lost out financially.

What’s the cheapest way to buy a decent insurance policy?

The easiest and often the cheapest way to buy insurance is through a comparison website. There are lots around but the four major sites are: MoneySuperMarket, Comparethemarket, GoCompare, and Confused.com.

These websites quickly show you a huge range of policies and it’s an easy way to buy one if you’re short of time. It’s also worth checking insurers that aren’t listed on comparison websites, such as Direct Line and Aviva.

However, it’s really important not to just buy the cheapest policy, or to go for one based on price alone. This is because you need to make sure the policy will work for you, and provides you with sufficient cover.

Look at the limits included in each section, especially the medical cover, and if you are over 65 or you have a pre-existing condition, you’ll need to specify this before you buy.

Here’s a few other important points to be aware of when it comes to the cost of travel insurance.

Annual cover may be more cost-effective than a single-trip policy if you travel regularly

An annual travel insurance policy does what it says on the tin. It covers you for all trips taken to countries specified within the policy within a year, usually as long as each trip is no longer than 30 days.

A single trip policy on the other hand just covers single trips. Which option you go for will depend on your own circumstances but on the whole it’s cheaper to buy an annual policy if you’re making at least two trips a year.

However, if you’re aged over 65 or have pre-existing health conditions it may be more cost-effective to go for single cover. In some cases this will be the only travel insurance you can buy, as some insurers may deem it too risky to insure you for a year if you’re likely to fall ill and require treatment.

How the excess works

When you make an insurance claim, you will need to pay a certain amount of money yourself, known as the excess. The amount varies depending on the insurer and the claim but a claim for a lost camera worth £1,000 with an excess of £100 would see the insurer paying out £900 and you paying £100, for example.

There are usually different excess amounts depending on what you are claiming for, and these will be listed in the policy document. If you buy cover through a comparison website, you can usually select how big you want your excess to be. Bear in mind that if you choose cover with no or a very small excess, this is likely to cost more than a policy with a bigger excess.

Have you ever made a claim on a travel insurance policy? Do you have any tips for people searching for cover? If so, we’d be interested in hearing from you. You can join the money conversation on the Rest Less community or leave a comment below.

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