| Brief Guide to Travel Insurance |
| Do I need travel insurance? |
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Apparently about 25% of British travellers don't bother. But even the briefest assessment of the dangers of travelling without insurance would show that this is a high-risk gamble.
It is all too common to lose a piece of luggage on a flight: add up the value of the contents of a simple overnight bag, and you are likely to find they are worth at least £250. Should you find you are suddenly unable to travel at the last minute, if uninsured you might have to forfeit all the money you have paid up front - for tickets, accommodation, the whole holiday package. But most important of all: if you get ill abroad, or have an accident, the cost of medical treatment and a special, assisted flight home can run into tens, if not hundreds, of thousands of pounds. Rule One: take out travel insurance - and do so as soon as you book your holiday. Unfortunately, travel insurance is complicated. There are a host of risks to be covered, and you need to make sure that the cover suits your needs. In other words, there's a lot of small print. It is tempting to think that the more expensive the premium (the cost of insurance), the better the cover. This is just not the case. It really pays to take a bit of time to compare the details of the policies on offer. Rule Two: shop around for the best deal. Fortunately, the Internet makes this relatively easy. Type something like 'travel insurance compare' into the search box of your chosen server and take it from there. And note that, these days, banks, supermarkets and high-street stores often offer better deals for travel insurance than established insurance companies. For sound general advice on travel insurance, see the website of the Association of British Insurers: www.abi.org.uk |
| The basics |
Travel insurance should cover you for the following risks:
It should also include cover for
It might also include
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| Medical expenses |
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This is the most important element of travel insurance. The cost of medical treatment abroad can be ruinous. For instance, break a leg in Europe and you could face a hospital bill of £9000, and £30,000 in the USA. Suffer a major heart attack, and the bill may reach £12,000 in Europe, and £50,000 in the USA. You may need special care to get you home, even an air ambulance. A scheduled flight accompanied by a medical attendant may cost up to £4,500 from Europe, and £8000 from the USA; and an air ambulance, up to £16,000 from Europe, and £35,000 from the USA.
Travel insurance has to cover all eventualities - medication, surgery, long-term hospitalisation, repatriation. In the light of this, it is recommended that you take out medical insurance with cover of at least £1 million in Europe, and £2 million worldwide. Travel insurance will usually also include provisions for compensation in the case of permanent injury or death. |
| Travelling within the EU |
| If you are a citizen of the European Union (EU), you can carry a European Health Insurance Card (EHIC) for treatment in Europe. This is obtainable online, by phone, or by filling out a form available from the Post Office. (The EHIC has replaced the E111 form, which since 1 January 2006 is no longer valid.) The EHIC entitles you to the same state-provided medical treatment as any member of the public in the country you are visiting in the EU, plus Iceland, Norway, Switzerland and Liechtenstein. But that does not mean you'll get the equivalent of the free treatment that British citizens receive with the National Health Service. With an EHIC you are likely to have to pay for treatment, then later to be able to claim back a portion of the costs. The EHIC is useful, and some insurance companies insist that you carry one for basic cover, but it is not a substitute for full travel insurance. For instance, it does not cover the cost of an air ambulance. For more about the EHIC see the Department of Heath website: www.dh.gov.uk/travellers |
| Pre-existing medical conditions |
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This is a thorny subject. When you apply for travel insurance, you will be asked if you have any kind of on-going medical problems, or are undergoing any investigation for such things. Basically, travel insurance companies are trying to filter out anyone who has an above-average risk of needing medical treatment when abroad. If you do have a pre-existing medical condition, they will either offer travel insurance at a higher premium; or refuse to cover any claim that results from that specific medical condition; or refuse cover altogether.
This can make it extremely difficult for people with severe medical problems (say, those receiving treatment for cancer) to get travel insurance at anything like the normal premium, if at all. However, there are companies that are more lenient, and some that specialise in this kind of risk, so don't despair. Investigate and shop around. Pregnancy is considered a special case, and may require special cover. In addition, pregnant women will not be covered if travelling within the stated number of weeks (typically eight to twelve weeks) before the expected date of birth. Note that pre-existing medical conditions also apply to close relatives, whose illness or death may result in the cancellation or curtailment of your holiday. Many companies will require you to declare if such people have had a life-threatening illness within the recent past - not something that is always easy to judge. However, in this difficult area, it is important to follow... Rule Three: be honest in your medical declarations. Failure to do so may well invalidate your case should you need to make a claim. |
| Cancellation/curtailment |
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You may have to cancel your trip abroad because of unforeseen circumstances, such as illness, accident or redundancy. Your travel insurance company will reimburse any money you have already spent in such circumstances. Also, you will be covered if you have to cancel because of the sudden illness or death of a close relative (the policy will define precisely who may be included in such categories). Your cover begins from the moment you take out insurance.
You may equally have to cut your journey short and return home quickly for the same reasons; the travel insurance company will cover the extra costs involved (but ensure you have its authority before spending extra money on flights etc). What you will not be covered for is cancellation because you have simply decided you don't want to go. |
| Age limits |
| Senior travellers need to watch out for age limits. Some policies put an upper age limit of 65 on their policies, or offer insurance at increased premiums for older customers; others go up to 74, others still to 89. Some travel insurance companies have no maximum age for single-trip cover. The premiums tend to mount with age. |
| Lost luggage and theft |
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Travel insurance should cover loss and theft of possessions, as well as damage to them. Make sure you are adequately covered: it is surprising how much a suitcase full of ordinary clothes and accessories is worth. Make sure also that the limit for the value per item covers your needs. Some policies refuse to compensate for the loss of any individual items with a value of more than £200, which may well be inadequate to cover for cameras, ipods, jewellery and so on.
You should also be insured for loss of money (up to certain defined limits) and documents (notably your passport, replacement of which could incur considerable added costs). Many policies offer a certain - fairly modest - sum to buy 'essential items' (clothing and toiletries etc) should your baggage be delayed or lost on the outward journey. You may well find that your household contents insurance already covers your possessions outside the home and abroad. In this case, you may wish to choose a travel insurance policy that makes baggage a separate, optional item, and simply not take that option. But remember that a claim on your household contents policy could affect your no-claims bonus. Note that you will not be covered for the loss of property if it can be shown that you have been negligent and have not taken 'reasonable care' with it. |
| Hazardous sports and activities |
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Ordinary travel insurance will usual exclude cover for any kind of hazardous activities, such as horse-riding, jet-skiing, abseiling, rock-climbing, bungee-jumping, mountain-biking, scuba-diving, whitewater rafting and so on. If you want to do these, especially as the main focus of your holiday, you can apply for special cover. Some insurance policies, however, acknowledge that you may wish to do one or two such activities in the course of a holiday as an incidental, one-off experience, and include cover.
Winter sports (skiing, snowboarding, skating etc) are considered as a separate category, requiring special cover. This is easy to arrange as a standard package, but will incur a higher premium than travel insurance without winter sports. |
| Personal or third-party liability |
| This covers you for damage that you might do to people or property while abroad. The risk may seem remote, but if some unfortunate accident occurs for which you are held responsible, your insurance should cover claims for compensation that might be brought against you. Cover of at least £1 million is recommended. |
| Legal expenses |
| Some claims may prove difficult to verify or pursue (such as claims for compensation for injury), and could incur high legal costs to prove (as much as £50,000). This should be covered as part of the policy. |
| Compensation for delayed departure |
| Many policies will offer compensation if your departure is delayed by unforeseen circumstances, such as an airline strike, or bad weather. Compensation usually begins after 12 hours of delay, increasing incrementally with every 12 hours. Usually the sums are relatively small, but offer some palliative in a situation that threatens to get your trip off to a bad start, and defray some of the costs that may be incurred. Similar compensation may be offered for missed connections. |
| 24-hour assistance |
| Most good travel insurance companies include a 24-hour emergency helpline service. In any circumstance in which you think you may have to make a claim, and in any real emergency, policy-holders can telephone the helpline and receive expert advice on what they need to do and how to cope, plus assistance in any language. Indeed, in any serious medical emergency, you may be obliged to call the assistance service as soon as possible; the insurance company can then make arrangements on your behalf. |
| Excess |
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Excess is the part of any claim for which you are responsible. If the excess in your policy is £100, you pay the first £100 of any claim. In other words, you cannot claim for a loss worth less than £100, and £100 will be deducted from any claim above that figure. The higher the excess in your policy, the cheaper the premium.
In choosing what level of excess you want to accept in a policy, consider the amount of time and effort that will go into making a claim. You may find that you are prepared to risk the loss of £100 in return for a reduced premium. |
| Annual travel insurance |
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If you make more than two trips abroad each year, then it is well worth considering multi-trip annual travel insurance. This means that you pay once a year, and get cover for as many trips as you like during that year. There will, however, be a limit on how long any of these trips can be (usually somewhere between 30 and 50 days), and may be a limit on the total number of days that you can be away in the year (usually about 120). Annual travel insurance normally works out far cheaper than taking out insurance for each separate trip.
There are two things to note. If you are buying cover for all your family (say two adults and two children), consider whether the family will always be travelling together during the year. If not, make sure that the policy covers members of the family travelling independently. Also, the ruling about pre-existing medical conditions does not apply simply at the time that you take out the annual insurance policy, but to the time that you make each separate booking for travel during the year. |
| Insurance offered as part of a holiday package |
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A lot of travel companies - package-tour operators, airlines and ferry companies alike - offer travel insurance as an add-on to their services. However, their insurance policies very often prove to be more expensive, or less comprehensive, than cover you can organise separately for yourself. Essentially this is inertia-selling: it is easier for you just to tick their boxes.
Some travel operators insist that you are covered by insurance when you buy their product. This is to cover the risk to them of you cancelling, and so on. But note that they cannot legally insist that you buy their insurance; this must be sold as a separate, optional item. However, you might be asked to show evidence that you have equivalent cover. |
| Complimentary bank and credit card travel insurance |
| Some credit cards companies and banks offer free travel insurance cover. But this usually relates only to flights and holidays etc that you have bought using that credit card or bank account. It rarely amounts to the full cover offered by dedicated travel insurance policies. Before you rely on such cover, check the small print. |
| Long-term travel |
| Most travel insurance policies relate to trips lasting up to four weeks or so. You may, however, want travel insurance to cover a journey lasting several months (such as world travel during a GAP year). Here you usually need to do a bit of work and research to find a reliable specialist travel insurance company that is prepared to offer good cover for a reasonable premium. |
| Remember to pack your policy details |
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Rule Four: carry two photocopies of your policy, and the policy details, with you on your travels. This should include all the details of your policy, and the 24-hour assistance/helpline telephone numbers. These documents will be invaluable if ever you need to make a claim - to check the details of your cover, and what you should do, and to be able to identify yourself quickly when contacting the insurance company. Keep your two sets of photocopies separately, so if one set is stolen or lost along with your suitcase, with luck you'll still have another set in your handbag or jacket pocket. |
| Claims |
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One of the great problems faced by the travel insurance industry, and the reason why travel insurance premiums may seem relatively high, is the incidence of fraud - people making false or inflated claims. For this reason, insurance companies demand an exhaustive - and exhausting - amount of paperwork to back up any claim.
Therefore, if you suffer theft or lose luggage when abroad, you will have to produce evidence that you have reported the loss (to the police in the case of theft, or to the airline company in the case of lost luggage). And you will have to prove that you really did possess the things that you claim to have lost in the first place. Basically, this means that you'll be fine if you have receipts for everything you own. But who does? Who keeps receipts for all their items of clothing? Perhaps you will start doing so after reading this. If you don't, you'll have to battle it out when you make a claim. The same applies to medical claims. Make sure that every stage in the process and every expense is rigorously recorded and documented. Rule Five: when making a claim, expect the insurance company to distrust you. |
| Dangerous places |
| Travel insurance may well exclude destinations that are officially considered dangerous by the Foreign and Commonwealth Office. Details of these, and other useful travel advice, are posted on its website: www.fco.gov.uk/travel |
| Summary: The Five Rules of Travel Insurance |
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| Comments, copyright and linking |
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