ConsumerValue: Insurance
6. Travel insurance
What is travel insurance?
Travel insurance 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.
However, if you have private health insurance, you are may already be covered for illness and injury, so check this before you buy, rather than paying for insurance you may not need.
The key issue with travel insurance from a ConsumerValue 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.
Single and 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.
How do I choose the best policy for me?
You should 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 this policy provide in the areas that I am 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 I have to pay myself?
- What restrictions and exclusions apply? Sometimes you are covered if your trip is cancelled or cut short for reasons set out in the policy document.
- What information do I have to give about my own health and the health of relatives? Many policies include the costs of an emergency return flight if a close relative of yours dies. 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.
You may get some cover if you book your trip on your credit card. Check the terms and conditions of your credit card account.
It is important to compare and consider not only the cost of different policies but also the protection each offers.
You should read all the terms and conditions carefully and ask questions on anything you are unclear on.
Many travel insurance policies do not cover pre-existing conditions (suffered by you and/or immediate relatives) that happen when you are abroad, unless you tell the insurer in advance and they accept that risk.
Your provider may refuse you cover for certain illnesses or place an extra premium on your policy, but if you do not tell them the truth, any claim you may make will not be valid.
Travel insurance and package holidays
Travel agents and tour operators often sell travel insurance, as part of a package, and you will almost always be required to have a certain level of cover in place if you are taking a package holiday.
It is important, however, to note that you do not have to take the insurance offered by the travel operator and 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 again in the same year.
How can I buy travel insurance?
There are two main ways of buying travel insurance, you can:
- Buy directly from an insurance company; or
- Buy through an intermediary, for example a broker, a 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 protection offered with price.
As a starter to give you an indication of the general range of travel insurance prices, check the FinFacts website, which carries a comparison of some of the rates available.
Note that this information is current to 2007 only, so you will need to contact the various insurers for a more up to date quote, personal to your specific needs.