Finding the best travel insurance policies for this summer

Friday, 10 June 2011 10:14

By Kate Saines

Holidays might be a time for rest and relaxation but there is nothing less calming to the mind, body and spirit than negotiating the minefield that is travel insurance.

At the end of May people comparing travel insurance had a bewildering 378 single trip policies to choose from.
That's a lot of insurance to negotiate.

And to make matters worse, says independent financial research firm Defaqto, which conducted the research, there were vast differences between the types and level of cover these policies were offering.

It is a confusing business indeed. Let's take 'travel abandonment' – a feature which is pretty relevant if you fear a re-occurrence of the ash cloud debacle.

If a trip has to be abandoned, 40 per cent of policies will provide you with £5,000 or more of cover for travel and accommodation costs – which is great news.

However, there are 14 per cent on the market which would only provide you with £2,000 of cover and 12 per cent will provide no cover at all.

And this is just one feature. There are huge variations between policies in plenty of other areas as well, which means there are a lot of variables to consider.

But if these statistics are filling you with fear – do not worry. Provided you know exactly what to look for in a policy you should find it easy to select the best travel insurance from the hundreds on the market.

Here's how.

Decide what you need from the policy

Before you even start researching insurance, decide what you are aiming to achieve from the product.

For example, if you are taking lots of expensive clothes and equipment with you, having a policy with enough baggage cover will be essential.

Or you may be concerned about medical cover because you are planning an activity holiday in which case you'll want enough benefit in this section of the policy.

Mike Powell, Defaqto's insight analyst for general insurance, said the increasing choice of policies has made identifying the right option complex.

"The key," he said, "is for people to focus on what they need from a policy in terms of features and cover and then to identify a product that provides this."

And while you might think you need the cheapest policy, you should not make price the top of your priorities.

Mr Powell said: "Although price is always likely to play a part in which policy someone selects, this should be a secondary issue rather than the main driver.

"If people focus on price alone, they can risk buying a policy that falls short of their needs – only to discover this when it's too late and they come to make a claim."

Use the comparison tools powered by to find the best deal on travel insurance

Key features your policy should have

Defaqto said there are five key issues people should consider when comparing policies.

1. Level of cover

First look at the level of cover provided for the essential areas of your policy. These include things like medical expenses, baggage, money and cancellation. recommends finding a policy with £2 million worth of cover for medical expenses, £1 million for personal liability and £1,500 for baggage.

When choosing how much cover you need for cancellations, or holiday abandonment, you should make sure the policy has enough to cover the total cost of your holiday.

It's also a good idea to make sure there is cover for scheduled airline failure and end supplier failure.

Also, check there is cover provided for delays. This is usually provided at an hourly rate, for every hour of the delay up to 12 hours.

2. Valuables

Defaqto advises you check the baggage section of the policy for the single item limits on any valuables.

Also make sure there's enough to reimburse you for any money you take by looking at the maximum limits provided for 'cash'.

A level of £250 for cash is recommended.

3. Excesses

For anyone new to insurance, most insurers will charge you an 'excess' on any claims you make. This is a sum of money you will need to pay yourself before the insurer will hand over the cash.

If £200 worth of baggage goes missing at the airport, never to be seen again, and you have an excess of £100, once a successful claim has been made you'll need to pay £100 and the insurer will pay the remaining £100.

Defaqto suggests you check the excesses on every section of your policy. It is important to make sure you find out how these are applied – are they per claim, per person or per section.

Moneysupermarket recommends you look for policy excesses of under £100.

4. Helplines

Find out if your policy includes a 24-hour international helpline, says Defaqto. These can be essential if you require medical treatment and need to make an urgent claim.

What's more make sure you take the number with you on your holiday and keep it in a safe place so it's to hand should you need to use it.

5. Dangerous sports

If you plan to take part in any hazardous activities or sports, find out if your policy covers this. Many will not provide this kind of cover as a basic feature so you may need to specifically ask for this.

See our guide to choosing the right type of travel insurance to suit your holiday

Getting a good deal

It is essential to ensure you don't get ripped off when buying travel insurance.

Where you buy the policy is important. Many travel agents or tour companies will try to sell you a policy when you book.

But there is lots of research suggesting these products, though perfectly legitimate and usually regulated by the Financial Services Authority (FSA), are more expensive.

Check out whether you already have travel insurance. Sometimes it can come as one of the benefits of a packaged account or by your credit card provider. Or you may have taken out an annual multi-trip policy earlier in the year for other holidays or breaks.

If you do have an existing policy, make sure it covers you for everything you require.

Check out the deals on as many price comparison websites as possible. Limiting yourself to one will provide you with only a selection of the deals on offer.

It's also important to make sure there is nothing covered in your travel insurance policy which you do not have elsewhere.

For example, Which? reckons you can knock £10 off an annual worldwide travel insurance policy by ditching baggage cover if you are already insured on your home insurance policy for possessions when you are away from home.

Check the under the 'all-risks' or personal possessions cover of your home contents insurance policy.

Additional back up

If you are travelling to Europe, make sure you have a European Health Insurance Card (EHIC). They provide UK travellers with free medical care when visiting European countries.

They do not, however, provide an alternative to travel insurance as they literally only cover you for state-provided treatment at the same level as nationals of the country you are visiting would receive.

In some countries, residents must pay towards treatment, and even with an EHIC card, this rule will still apply to you.

The EHIC also does not provide you with emergency costs like mountain rescue at a ski resort. Likewise you won't receive cover for your belongings, delay, cancellations or personal liability.

Use the comparison tools powered by to find the best deal on travel insurance

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