Travel Insurance Basics
Setting off on a holiday is an exciting time. There are the days of anticipation – getting everything organising, squeezing the last of your clothes into an over-packed suitcase, then the tension of getting to the airport on time, until finally the plane takes off and you allow your body to relax.
But did you remember travel insurance?
What is Travel Insurance For?
There’re actually a surprising number of situations travel insurance covers, but some of the most important ones that float to the top are medical cover, holiday cancellations and belongings:
Most of us have grown up with the NHS and never turn our minds to the fact that doctors and hospitals incur a cost that must be paid for. Once you step out of the UK, you are subject to the health system of the new country and some of those have extensive costs. While a European Health Insurance Card (EHIC) gives you minimal cover across the EU, it is considerably less effective than insurance and should not be considered a substitute.
In all cases, and especially if you are travelling with children, you should be sure to have travel insurance to cover medical needs alone – you cannot be sure something won’t happen while on holiday and in some countries, America for example, you can suddenly find yourself faced with a bill for tens of thousands of pounds!
It is generally recommended that you look for a minimum of £2,000,000 worth of cover, which should include repatriation to cover you should you need to be flown back to the UK.
Cancellation and curtailment
Sometimes even the best plans don’t follow expectations. If you find yourself in the horrible position of having to cancel your holiday, either before the event, or curtailing it once you are there, your travel insurance will reimburse you the cost of your holiday.
It is easy to think that it won’t happen to you, but a family member falling ill or a significant problem at work could unexpectedly put an end to an expensive trip and recovering the costs of that can be stressful, if not impossible, for many.
For this reason, it is recommended that you cover the full cost of your holiday.
We’ve all heard tales of suitcases that find their way to Iceland instead of Ibiza. Eventually it usually ends up in its correct destination, but what if your luggage genuinely goes missing or, worse, is stolen? Covering your personal possessions will help you have a relaxed trip.
Most policies are relatively low value – covering typical things you take on holiday. If you have to take high value items with you (jewellery, expensive equipment etc.) then you will need to contact your insurer to add those specific items on.
The single-item limit is often no higher than £300.
Insurers do expect you to do what you can to mitigate the risks. If you leave a bag or suitcase unattended in a public place, or leave hotel rooms open, they have the right to refuse the claim. Be sure to take reasonable care of your items.
Like all insurance policies, travel insurance comes with an excess – the amount you are expected to pay towards any claim. If you wish to claim for something worth £250, and your excess is £75, then the amount you can expect from the insurance company is £175.
Unlike other standard insurance policies, such as your car or home insurance, travel insurance often has different excesses for different items under the policy and you must cover each one separately.
For example, you may have travel insurance covering both medical needs and cancellation, with an excess of £100 on the first, and £150 on the second. If you are sick, have some treatment and then return home early as a result and wish to claim for both the medial expenses (£1200) and the curtailment of £1500, you will have to pay you excess on both. After paying this you will only receive £1100 regarding the medical costs and £1400 for curtailment - meaning your costs are a total of £250.
Voluntarily increasing the size of your excess will lower the cost of your travel insurance, but be sure to set it at a realistic level – you don’t want to make it so high that there’s no point claiming on the insurance should anything happen!
The Right Destination
Travel insurance from the UK usually takes the form of Europe-only or worldwide. Be sure to get the insurance that covers you for all the countries you plan to visit.
Check with your provider, as many Europe-only insurance policies stretch to include border countries, such as Egypt or Turkey – you may get lucky and be able to save significantly.
If you are only going on one holiday a year, single trip insurance is probably the best option for you – a one-off insurance policy tailored to that trip.
However, for those who travel regularly, opting for an annual multi-trip policy could be the right way to go - for most people who take three or more trips a year, this is considerably cheaper than multiple single trip policies.
For those who are planning a multi-country extended trip, such as a gap year of travelling, you may need backpackers’ travel insurance, as standard travel insurance is unlikely to provide cover beyond a month.
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