Travel insurance is designed to protect you against the cost of any unforeseen events when you are on holiday, or before if they force you to cancel your break. It’s up to you if you buy a policy. Cover varies hugely between deals, so reading the small print before you buy is vital.
The benefit of cover
A good travel insurance policy will ensure that any unexpected medical bills are paid and that you can get home in an emergency. Even routine surgery such as an appendectomy costs around £7,500 in Europe, according to insurer esure, increasing to £25,000 in some parts of America.
It may also meet the cost of new baggage if your luggage is lost or stolen, and compensate you if your trip is cancelled, your travel delayed or you miss your departure.
Whether or not you are buying insurance you should take a European Health Insurance Card (Ehic) with you when you travel to the continent.
This provides you with access to free medical treatment in EU countries, as well as Iceland, Liechtenstein and Norway, but it will only fund you up to the level of free treatment given to locals. You could find this is significantly less comprehensive than the NHS, leaving you with a big bill – and it won’t cover the cost of repatriation. So it shouldn’t be relied upon exclusively in the event that you fall ill or suffer an accident abroad.
You can apply for an Ehic online from the NHS.uk website. It is entirely free to get. Don’t be fooled by unofficial, copycat websites that may charge you for an Ehic if you apply through them.
Cost of cover
It’s now cheaper than ever to get travel insurance, with some single-trip policies only costing around a fiver. But remember that cheapest is not necessarily best, as the cover might be inadequate and the service a little thin.
Start with price comparison sites, which give you a range of quotes to choose from with varying levels of cover for your situation. Make sure you check what is covered by each policy and that you are comparing like with like. A more expensive deal might have a smaller excess, the amount you need to pay towards any claim, or a higher payout if, for instance, you lose your luggage.
Buy your cover directly from the insurer rather than from a tour operator or travel agent. It will be cheaper, and if anything goes wrong you will have recourse to the Financial Ombudsman Service to claim compensation.
Choosing a policy
If you are likely to take more than two trips a year, it is probably worthwhile investing in annual multi-trip insurance rather than a single-trip policy.
Annual polices will cover you no matter how many times you go away during a year, so you won’t risk forgetting to buy insurance. Typically they cover trips up to around 31 days each, and if a trip is longer than this you can speak to your insurer and get specific cover.
If you’re planning a gap year or career break travelling the world, you may need to opt for a backpackers’ policy. This covers trips lasting a year or 18 months.
Level of cover
The level of cover you need depends on a variety of factors. For example, if you have a holiday home abroad that you visit four times a year, and travel by cheap budget airlines, you may not see the need for cancellation cover in an annual policy. In this case, you might choose a cheaper policy with just repatriation, medical and personal liability cover.
However, if you are heading off on an expensive cruise costing thousands of pounds, you may be willing to pay a higher premium for greater cover, as cancellation of the trip could see you lose a hefty sum. A cheap policy may limit cancellation cover to £500, but around £3,000 is generally recommended.
The amount of baggage cover you need depends on the value of the possessions you will be taking with you. There is often a limit of £200 per item, so make sure your home insurance covers you for any expensive items outside the house.
Declare to your insurer any valuables you are taking, such as a camera or jewellery, to establish whether special procedures are required – for example, locking them in a safe, or paying an additional premium.
The minimum medical protection recommended for Europe is £1m, and £2m for the US where hospital costs are higher. However, many quality policies automatically cover up to £5m.
The excess, which is the sum you are required to pay of any claim before the cover kicks in, varies depending on the policy. Some insurers don’t charge any, although these are few and far between. Typically it is around £50-£75.
Check for exclusions
Study the small print carefully, and make sure you’re aware of any exclusions. Alcohol is one to consider. If you are ill or have an accident after drinking, your insurer is within its rights to refuse the claim.
Insurers will not provide cover for any areas banned for travel by the Foreign Office. Some policies don’t cover terrorism and would therefore not meet any medical costs if you were caught up in an incident.
The majority of sports are accepted by default, such as standard watersports and horse riding. That said, check this carefully as some policies have strange exceptions – we recently found a policy covering cricket but not football.
If you’re going skiing, double check you’re covered for “winter sports” and what that means in practice. For example, you may not be able to make a claim if you don’t wear a helmet or if you leave your ski equipment unattended.
Other activities with an additional element of risk associated with them, such as jetskiing, hang-gliding, parachuting and bungee jumping will not be covered under a normal policy, but specialist cover is easy to find.
Making a claim
You will need to provide proof of any incident.
• Report all thefts or losses to the nearest police swiftly and ask them for a written police report. Get a receipt from the airline or baggage handler for lost or damaged luggage
• Get your paperwork in order for medical claims, and keep all receipts for all expenses
• Contact your insurer as soon as possible for a claim form. Complete it and return it with any suitable evidence, including copies of receipts, photographs and any police or medical reports you have
• If you do send any original documents, always make sure it is by recorded delivery, and you keep photocopies
• Keep all correspondence between yourself and the company. Make accurate records of every phone call, the name of the individual you spoke to and the time you spoke to them.
• If your claim is rejected, appeal against the decision. You should produce any further evidence to help the insurer decide in your favour. If this does not work, contact the Financial Ombudsman Service to see if it can help.