Travel insurance tips
March 2009
The summer is almost around the corner and you may be arranging some holidays or trips you will take yourself, with friends or with family.
You may be asked to have insurance for some of these trips, or you may just wish to have it yourself even if it’s not required.
Here are some tips on what to watch out for in order to get the best value insurance deal.
Is travel insurance a legal requirement?
No. On many trips, such as flight-only travel, it will not even be a mandatory requirement.
But if you are booking a pre-arranged package holiday, you will almost certainly be required to have some level of cover in place.
The key issue with travel insurance from a consumer value perspective is whether you need the cover and whether the cover offered by a particular policy at a particular price represents good value relative to your needs.
What does the travel insurance cover?
It may cover you for some costs if you suffer loss, damage or delay of luggage, cancelled flights, delayed or missed departure, curtailments of your trip, loss or theft of money or passport and illness or injury.
Always check the terms and conditions carefully before signing up to see what exactly is covered.
Remember too that you may already be covered. If you have private health insurance, for example, you may already be covered for illness and injury, so check this before you buy, rather than paying for insurance you do not need.
You may get some cover if you book your trip on your credit card. Check the terms and conditions of your credit card account.
Should I use single or multi-trip cover?
If you plan to take more than two trips per year, it may be cheaper to buy annual holiday insurance (a multi-trip policy) rather than separate single trip policies.
If you have a health insurance policy, you may be able to get discounted travel insurance from your health insurance provider.
Do I have to take a travel agent’s offer of insurance?
No, you do not have to take the insurance offered by the travel operator. You may be able to get better value by buying your travel insurance separately from a regulated provider.
Multi-trip insurance may be your best option, particularly if you will need travel insurance later again in the same year.
How do I choose the best policy?
Always be aware of the conditions of your cover and any restrictions that apply. Before signing up to a policy, ask yourself:
- What cover does the policy provide in the areas that you are particularly concerned about? It may be medical cover, cover for delays or cancellation. Different policies provide very different mixtures of cover. Some holidays such as sports/adventure holidays may need specialist insurance.
- What "excess" applies to the cover? In other words, how much of any claim will you have to pay yourself?
- What restrictions and exclusions apply? For example, check whether you are covered if your trip is cancelled or cut short for reasons set out in the policy document.
- What information do you have to give about your own health and the health of relatives?Many policies include the costs of an emergency return flight if a close relative of yours dies. Always remember that you may not be able to claim if you have not filled out your medical information truthfully.
- What must happen before you make a claim? You usually have to report losses or theft quickly to the local police or the airline lost-luggage department. Check if you have to inform the insurer immediately. If so, keep the relevant contact numbers with you.
It is important to compare and consider not only the cost of different policies but also the protection each offers.
Read all the terms and conditions carefully and ask questions on anything you are unclear on.
How can I buy travel insurance?
There are two main ways:
- Buy directly from an insurance company, or
- Buy through an intermediary such as a broker, travel agent, tour operator or airline
You can shop around in person, by phone or online. Remember that the policy offering the lowest premium is not always the best. It is essential to read the fine print first before you sign up.
The key is to shop around and to get as many quotes as possible, enabling you to compare the levels of protection offered and the prices.
As a starter, check the FinFacts website's comparison of some of the rates available, which gives an indication of the general range of travel insurance prices. Then make sure to contact the various insurers for the most up-to-date quote, personal to your specific needs.
Learn more
Find out more about getting the best value on this and other insurance deals in our ConsumerValue guide