A recent poll carried out in the UK found that many people are unsure whether purchasing travel insurance is a good idea. Out of two hundred respondents, more than two in ten said that they believed that insurance providers did all they could to avoid paying out, whilst over ten percent said that they were reluctant to take out a travel insurance policy because the cover provided did not appear to offer protection against all eventualities; the eruption of the Icelandic volcano in 2011 being a case in point.
However, industry experts still strongly advise people to take out travel insurance. Although there are some rare events that travel insurance will not cover, a standard policy will offer financial protection against more common problems including a period of illness, or an accident whilst overseas that leads to hospital treatment or an inpatient stay, and a death in the family that results in you having to cut your trip short and return home.
Whilst looking for a suitable travel insurance policy for your next trip bear in mind that policy terms and conditions can differ massively, and the cheapest policy may not always offer the best deal. Different providers pay out for different things so it is important to find a level of cover that best meets your needs.
A premium policy is naturally more expensive, but it does offer cover for a wider variety of events so may be worth the increased cost if you can afford it. Travelsupermarket.com has recently noticed a far greater demand for premium travel insurance policies on their website. These types of policies offer more comprehensive levels of cover including trip delay, scheduled airline failure and end supplier failure.
If you enjoy extreme sports you will most likely find that these types of activities are not covered by a standard travel insurance policy. As this is the case you should definitely look for an insurer that offers specialized cover for high-risk activities, or you could find yourself significantly out of pocket.
The minimum amount of cover that it is recommended you take out should include health and medical cover, 24-hour emergency help and service, cover for lost and stolen possessions, personal liability in case you cause injury or damage and a legal case is brought against you, cover for curtailment and cancellation, and cover for adventurous activities if you intend to take part in any. Depending on your budget you may also wish to cover any legal expenses you incur, or to take out protection in the event that your airline or tour operator goes under.
As a general rule of thumb levels of cover should be: £2m for medical expenses, £1m personal liability, £3,000 cancellation (or enough to cover the cost of your holiday), £1,500 baggage, £250 for cash, with a policy excess of under £100. In addition, you could include cover for scheduled airline failure and end supplier failure, and delay cover (e.g. £20/hour for first 12 hours).
All policies have exclusions and the majority do not offer cover in certain circumstances. If, for example, you are involved in an incident that is drug, or drink related most insurers will not pay out. Similarly, if you do not take reasonable care of your possessions you are unlikely to be reimbursed for them if they are lost or stolen.
UK residents also benefit from protection from other sources, although it is still advisable to take out travel insurance and not rely on these additional benefits exclusively.
If you plan to take a trip within the European Union then you should apply for a European Health Insurance Card (EHIC) before you set off. This document provides you with state-provided healthcare in any European country you visit. However, it will not cover additional costs such as transportation home. Conversely, some insurers demand that you have an EHIC or they will not meet your additional costs; so be sure to check the small print prior to your trip.
If you purchase a package holiday you will receive Air Travel Organisers’ Licensing (ATOL) protection. This covers you should the company with whom you have booked your holiday go bust. In addition, you are also protected by the European Package Holiday Directive if you were to become stranded by unforeseen events resulting in you not having to pay for additional accommodation.
If you choose to pay for your travel with a credit card, due to the Consumer Credit Act, your card provider will be jointly liable should your supplier go under. This cover is only applicable if you spend at least £100.
Although travel insurance may not provide cover for unexpected events, such as the Icelandic volcano, it is still extremely unwise to travel overseas without it. Claims for loss of baggage and personal belongings, and emergency medical treatment, are common occurrences and can amount to thousands of pounds. If you do not have a travel insurance policy in place then you would be solely responsible for these costs. Depending on your circumstances this could lead, in the worst-case scenario, to financial ruin.