Travel cover is not a luxury, it's essential
One in five Britons jets off abroad hoping not to have an accident or any other mishap – and that can be an expensive mistake
Sunday 24 July 2011
With schools breaking up and the British summer proving to be a washout, now is the time when many of us are jetting off abroad.
But holidays can be dangerous; as soon as you arrive at your destination you can fall victim to an opportunist handbag thief or a speeding scooter rider. And that's assuming your travel plans aren't thwarted by bad weather, volcano eruptions, or an airline going bust.
Yet, despite the risks, a shocking one in five Brits still venture abroad without travel insurance, according to the travel association Abta. This means that if something goes wrong – if they fall ill, have an accident or have all their possessions stolen – they are on their own.
Abta's head of finance, Mike Monk, says: "It is very worrying that almost one in five travellers is going abroad without insurance and running the risk of substantial medical bills. Many believe incorrectly that the Foreign Office will pay their expenses.
"Also, well over half of UK holidaymakers are in danger of not being covered for cancellation charges due to illness or redundancy. In the current economic climate saving the cost of travel insurance could prove a very false economy."
The dangers are highlighted by the plight of a Kent couple who face a bill of £98,000 to fly home their son, who is in a coma after a motorbike accident in Indonesia, last month. He had no insurance and his parents have already spent £22,000 on medical bills.
There's certainly plenty of choice when it comes to buying travel insurance. If you book via a travel agent they are likely to try to sell you insurance as well. Alternatively, you can buy policies on internet comparison sites, or buy direct from an insurer or bank.
The main downside of buying travel insurance at the last minute is that any cancellation cover included in the policy will be virtually worthless. Most policies include cover which kicks in if you need to cancel your trip due to illness, a death in the family or redundancy. So it's a good idea to buy insurance around the same time you book your holiday, or else have an ongoing annual policy in place.
So, as well as cancellation cover, what else should you look for in a travel insurance policy? One of the most important things is medical expenses and repatriation cover. Medical bills can be eye-wateringly high in the US and Canada particularly, so, for this part of an insurance policy, experts recommend cover of about £2m.
A good travel policy will also include about £1,500 worth of baggage and personal possessions cover, but a lot of policies have limits much lower than this, so do check. Some expensive items such as cameras might need to be insured separately.
Other cover you should look for includes personal liability (in case you injure someone else), end-supplier failure (in case your airline or hotel goes bust) and terrorism cover. During the volcanic ash-cloud crisis some insurers made payouts to stranded customers while others didn't, so check the "travel disruption" cover.
Aviva, the insurer, offers travel disruption as an add-on and this covers strikes, cancellation due to Foreign Office warnings, pandemics, natural disasters, and airspace closure.
If you buy a package holiday, your agent or operator will probably try to sell you their own travel insurance for the trip. Although convenient, this is one of the most expensive coverage options and holidaymakers are better off shopping around elsewhere.
It's also worth checking if your current account offers travel insurance as a free perk. If so, check the small print to make sure it covers everything you need. Some of these policies are basic and may come with age limits that exclude older travellers. Others are surprisingly comprehensive. Nationwide, for example, offers free European travel insurance to Flex Account customers. The policy also covers some countries outside Europe, such as Egypt and Lebanon.
Otherwise, comparison sites such as Confused.com or Moneysupermarket.com are your best bet. These sites compare premiums, cover levels and excesses from mainstream insurers as well as from lesser-known online firms. You can usually click through and buy the policy online.
Policies can be purchased for single trips or as an annual multi-trip policy. If you go away a couple of times a year, an annual policy is best. As the table above shows, a family of four will pay about £28 to £32 to insure a 15-day trip to the US, but the same family can get a worldwide annual multi-trip policy from about £40.
But bear in mind that even with an annual policy, there is likely to be a maximum trip length of 30 days; so people going for an extended break or gap year need to shop around for a long-stay or backpacker policy.
If you're a skier, make sure that any annual or multi-trip policy covers winter sports. In addition, adrenaline junkies should check their policy before embarking on anything insurers might consider "dangerous".
Tom Bishop, head of travel insurance at Direct Line, says: "Most standard activities won't increase your premium, while others, such as bungee jumping, safaris, spear fishing or caving will add an additional fee to the standard cost of your insurance.
"At Direct Line, only a very small number of activities are completely banned from cover, so you can still take part and be insured as long as you advise us when you buy the policy. Some very dangerous activities such as base-jumping and storm-chasing are declined completely, meaning if you get injured while taking part you won't be covered at all.
"To make sure you're covered, tell your insurer about all of the activities you plan to do while you're on holiday, and they can advise on your options for cover."
As well as travel insurance, you'll also need to check your car insurance if you're taking your car to the Continent. Research by Moneysupermarket.com found that many providers will automatically downgrade a fully comprehensive policy to provide only the minimum level of cover required for the country you are driving in. For example, both Marks and Spencer and Endsleigh honour their fully comprehensive policies for 90 days of driving in Europe, but other insurers automatically downgrade policies to the minimum level.
Peter Harrison, a car insurance expert at moneysupermarket.com, says: "It's crucial that motorists study the small print of their policy, as their provider could automatically downgrade a fully comprehensive policy to either the minimum cover required for the country you are driving in or even third-party only.
"If you were unfortunate enough to have a crash while abroad and were only covered for third party, you could be left with a hefty bill."
Roman Bryl, swiftcover.com
"Travellers to Europe should get a European Health Insurance Card or EHIC (ehic.org.uk). This allows access to the same state-provided healthcare as a resident of the country they are visiting. [But] essentially, it's important to have private travel insurance as well as an EHIC. An EHIC won't cover the cost of repatriation – an air ambulance from Europe could cost £25,000 plus, and a good travel insurance policy will cover this."
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