Holiday insurance is remarkably cheap these days. Multiple trip, annual, cover for a family can cost as little as £60-£100, so you would think there would be no excuse for anyone to leave the country without it.
Surprisingly, this is not the case. According to Sainsbury's Bank, 3.33 million Brits went abroad last year without adequate travel insurance. That's 13 per cent of travellers who ran the risk of running up huge medical and legal fees in the event of accident, illness, injury or death to a third party.
Even more seriously, 2.24m travellers went on adventure holidays without cover for extreme sports in 2006, according to AXA insurance.
You don't have to look far to see examples of this folly. Michael Winner, the film maker, who regularly appears in television advertisements for the insurer, esure, went on holiday to Barbados without travel insurance and nearly died as a result of a very rare form of food poisoning.
Winner survived to tell the tale and avoided having to have one of his legs amputated, but only thanks to his friend, the millionaire businessman Philip Green, who shelled out £20,000 for an air ambulance back to the UK which saved his life.
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Making full disclosure
Hopefully this salutary tale will encourage those who still think it is worth taking the risk of travelling uninsured to think again.
The important thing to remember when buying travel insurance is to get appropriate cover. If you are going skiing, make sure you buy ski insurance and not a standard policy, or if you are going white water rafting, make sure that you are covered for extreme sports.
In fact, if you are going to do anything remotely dangerous or out of the ordinary, it is essential that you tell the insurer at the point of application. If you are going trekking in a tropical rainforest, the underwriter needs to be know this. Otherwise, if you are bitten by a python, your claim could well be turned down.
The same applies to disclosing medical conditions, however minor. That means that even common ailments such as diabetes, asthma and high blood pressure need to be declared. The same applies if you are pregnant or have recently had medical treatment or undergone an operation.
Failure to do so could invalidate your policy altogether because the insurer could argue that you have not been entirely honest.
Annual multi-trip: If you want to go abroad more than twice a year, it is usually worth buying annual cover. This is a year long contract with one insurer covering multiple trips of a maximum individual duration, of usually 31 days each, to specified regions.
Some insurers allow any number of journeys in the course of a year, but others limit the number of trips per year or limit the total number of insurable days to, say, three trips a year of 45 days each, to 120 days in total.
Long stay: A single trip contract, usually covering travel to a named destination but with a longer term - like a year or more.
Backpacker insurance: Long-stay cover in multiple destinations for the 'young,' typically up to age 36.
Sports: Policies tailored typically for golfers and winter sports enthusiasts. Many single and annual policies include basic ski-ing and winter sports activities, but check the small print. If you intend to undertake anything like off-piste sking, snow boarding or any other dangerous sports, you must declare it.
Over 60s: Policies for the older traveller which can be more expensive because of existing medical conditions.
Adventure/hazardous/extreme pursuits: For instance, abseiling, ballooning, bungee jumping, hang gliding, tobogganing, mountain climbing, potholing and parachuting. Even mainstream sports like canoeing, athletics, basketball, scuba diving, judo and karate are generally included in this category.
Standard/premier/premier plus: Many insurers offer varying levels of cover to suit different client needs.
Number of people: Cover may be taken out for an individual, a couple, a family or a group.
Basic travel insurance: if you are taking a short break over the bank holiday, be sure to buy appropriate travel insurance, if you want to avoid your dream short break potentially turning into a nightmare.
The European Health Insurance Card (EHIC) which millions of Brits carry when travelling in Europe each year, may be a useful back stop for emergency medical treatment, but it should not be regarded as a replacement for full travel cover.
The EHIC, introduced in January 2006, entitles EU residents to emergency medical treatment in the event of accident or illness when travelling within the European Economic Area (EU countries, as well as Iceland, Liechtenstein and Norway).
But the service covered by EHIC will only match the standard cover provided to citizens of the country you are travelling in, which may not be equivalent to that provided by the NHS, so a contribution to the cost of your treatment may be necessary.
For instance, the EHIC card will not cover repatriation to the UK, whereas comprehensive travel cover will pay for full medical care (typically up to £5-£10 million), repatriation to the UK where necessary, or for a relative or friend to fly out to be with you during your recovery, if it is decided not to repatriate you.
Some insurers (including Churchill, Direct Travel, Halifax, Marks & Spencer, Post Office, Saga and Sainsbury's Bank) will waive the excess on any medical expenses claim if you have used an EHIC card while abroad, saving you anything from £35 to £100.
Cover for the cost of your holiday should you have to cancel a trip due to illness or family reasons is typically up to £3,000, while baggage cover for the replacement of 'essential belongings' should your baggage be delayed on the outward journey ranges from around £100 to £450 (Direct Travel Premier Plus).
But make sure you don't over insure. If you already have cover for belongings 'away from home' under a home contents policy, you can ask your travel insurer to deduct this feature from your policy and give you a discount off the full premium.
Cover for lost or stolen baggage is typically limited to around £1,500-£2,500 in total, but with a limit of around £300 for each individual item, so be aware that expensive items may not be fully covered. Insurance for all money taken on holiday (including travellers' cheques) is typically capped at £500.
Other useful features of travel policies include personal accident cover (providing a fixed payout should you die or become permanently disabled), missed departure (for the costs of making new travel arrangements if you miss your departure through circumstances beyond your control), travel delay (payable after more than 12 hours), personal liability (typically up to £2 million) and legal expenses (up to £50,000).
The latter two features are crucial, in the event that you cause injury or death to someone while on holiday, as a claim for damages could cost you hundreds of thousands of pounds.
While cover for short duration trips can be obtained for as little as £10-£50 per adult for a week in Europe, frequent travellers will normally find an annual policy (typically £60-£100 for a couple) far more cost effective.
Travel policies vary dramatically, so it is essential that you buy appropriate insurance which matches the value of your belongings, the cost of your holiday and the type of activity you will be engaging in. Above all, remember that cheapest is rarely best.*
What am I covered for?
Medical expenses and repatriation expenses: Pays for 24 hour emergency assistance, including repatriation when necessary. Typically £1m-£10m.
Personal accident: Compensation for loss of limbs, sight, permanent disablement or death following an accident. Typically £15,000-£75,000.
Personal liability: Legal costs if you damage or injure a third party and/or their property. Typically £1m-£2m.
Legal expenses: Covers legal action if complaining about personal injury or to the holiday company. Usually £50,000.
Cancellation and curtailment cover: Compensation for abandonment or curtailment of the holiday because of family illness or bereavement.
Delayed departure: Typically £20 payable after 12 hour delay at point of departure.
Missed departure: If you miss your flight because of delay in public transport, your car breaks down or you have an accident.
Personal possessions: Total cover usually £1,500, but typically only £200-£250 per item, but check your home insurance as this may provide coverfor personal possessions outside the home.
Theft of money: Usually up to £500, with a limit on cash of up to £200-£250. Cash and passports must be secured whenever possible in a hotel safe deposit box, but you could claim if you are mugged or pick pocketed.
Loss of passport: Usually £250 to replace your passport if lost, stolen or destroyed.
Hijack: not always covered under standard policies, but may be if you have a premium policy. Typically £1,000.
Excess: Remember that an excess of typically £50 (£100 for personal liability) will be deducted from each and every claim.
(a) Motor vehicles are not covered by travel insurance policies. You may have to arrange extra cover through your existing motor insurer. At the very minimum, you must have a "green card" to drive in Europe, which proves that you are insured.
(b) Motoring Assistance can be added to your travel insurance policy to cover pre-journey risks (replacement vehicle due to breakdown, accident or theft), roadside assistance, legal expenses, hotel accommodation and repatriation.
(c) Plan your insurance well ahead of the event so as to have time to read the small print of the policy.
(d) Tailor your cover to the requirements of your holiday.
(e) Search for travel cover online. You can examine the policy terms and conditions at your leisure without sales pressure. You can usually find them on the website.
(f) Annual multi-trip policies are cheaper than a series of single-trip policies.
(g) Group (couples, families) is cheaper than a set of individual policies, but joint multi-trip cover will only be appropriate where partners regularly travel together.
(h) Discounts may be available for by Internet rather than by telephone.
- Renew your travel insurance at least a week before you go on holiday. Don't leave it to the last minute, otherwise you might not have time to check that the policy schedule is correct before you leave.
- If you are renewing an annual policy, clearly you don't need to renew it until you are about to go on holiday again. But remember that annual policies cover short breaks as well, so check that your policy is live, even if you are only going to Paris for a long weekend.
- If you are travelling in the EU, make sure you have a European Health Insurance Card which provides free or discounted medical services in EU countries, as well as Switzerland.
- Don't rely on the 'free' travel insurance which comes with some credit cards and bank accounts. These policies can be fairly basic and may not cover you for winter or extreme sports, so check the small print, and if necessary buy extra cover.
Last edited May 2007