This chapter is about the issue of travel insurance and offers advice and information about:
- Why travel insurance is necessary
- Alternatives to travel insurance
- What a good travel insurance policy should include
- What kind of travel insurance to buy
- Travel insurance for domestic holidays
- Whether you already have travel insurance
- Where to purchase travel insurance
- Making a claim on your travel policy
- Insurance when travelling by car
Buying travel insurance – What you need to know
In this chapter we consider all the different aspects of buying travel insurance. We look at what a good policy should include, the different types of travel insurance, where to purchase travel insurance and how to make a claim. The second part of the chapter is about the precautions to take when travelling by car on holiday, whether you are driving your own car or hiring one and how to make sure your insurance covers you for every eventuality but doesn’t cost a fortune. Let’s begin with the most basic questions: why is travel insurance necessary and are there any cheaper alternatives to buying the cover sold with your trip?
Why is travel insurance necessary?
Travel insurance, like any insurance cover, protects you from financial loss if anything happens during your holiday. This could be because of cancellation/delays (because of the travel company/airline or because of personal circumstances beyond your control) or due to a medical complaint or emergency whilst you’re away. Finally, travel insurance will cover you for personal possessions if they are lost or stolen.
Are there any other organisations or schemes which can protect you whilst you’re on holiday? Let’s look at them in depth and consider their limitations as to how far they can help you if you run into trouble on holiday.
The British embassy and consulate
According to research by ABTA, 16% of people questioned said that they didn’t think that travel insurance was necessary as the British government (or its representatives abroad) would pay for any medical expenses. In fact, although the FCO can help you with replacing lost travel documents and will help arrange for money to be transferred from the UK, they won’t pay for the costs of hospitals. For a fuller understanding of what embassies and consulates can do, go to this website.
The European Health Insurance Card (EHIC)
The EHIC replaced the E111 form in 2006 and with it you’re entitled to medical care in the 27 countries of the European Union as well as the 4 members of the European Free Trade Area (Lichtenstein, Iceland, Norway and Switzerland). An application for an EHIC can be made online and is completely free of charge. It must be renewed every 5 years and every person in your party requires their own card including children and babies.
There are a number of things to bear in mind when relying on this card. The medical care which is on offer is not necessarily of the same standard as the NHS so you may find that food and/or bed linen during hospitalisation is extra. Rules which apply to locals also apply to British citizens who use their healthcare services. This means you might have to make a contribution of up to 20% towards medical costs while some healthcare schemes require you to pay upfront and then apply for a refund.
Although 33% of those questioned in the survey by ABTA believed that the EHIC would pay for the cost of an air ambulance, this isn’t the case. This card doesn’t pay for the cost of repatriation and nor does it give you cover for cancellation, delays or lost/stolen possessions whilst on holiday.
Travel insurance protects you from financial loss if something goes wrong on holiday such as an accident or a robbery.
The British Embassy/Consulate can only offer you limited help on holiday and won’t pay for medical bills.
The European Health Insurance Card (EHIC) entitles you to medical care in state facilities in most other European countries and is free.
Facilities may not be the same standard as the NHS and you might have to make a financial contribution.
The EHIC doesn’t pay for repatriation costs and nor are you covered for cancellation or lost/stolen possessions.
Financial protection for holidays
If your flight is cancelled or delayed, you might be entitled to compensation or a refund from the airline or travel provider. All British travel firms which offer air travel must be a member of ATOL (Air Travel Organisers Licence), which is a consumer protection scheme run by the CAA (Civil Aviation Authority). Their financial scheme means you will be able to finish your holidays and won’t be stranded abroad if the company goes bankrupt.
Apart from ATOL, you should check that your holiday provider is a member of other professional bodies. For example, BCH covers coaching holidays. In this way, you’ll be protected if something goes wrong. This help is invaluable if something goes wrong with your holiday company but doesn’t help you with other possible hitches such as getting robbed or injured.
Airlines and lost luggage
Although you’ll be covered by the airline’s insurance if they lose your luggage, don’t imagine that you’ll receive the full costs for your lost belongings. They usually allocate a specific minimum value per kilogram and this won’t pay to replace all the items you had in your suitcases. You should never put high-value items in the cargo hold since your travel insurer will also probably reject your claim as it wasn’t under your immediate personal supervision.
What should a good travel insurance policy include?
As you can see, travel insurance is vital since it’s the only safeguard to protect you financially from everything which could possibly go wrong on holiday. Let’s now consider what a good policy should include.
Your travel insurance should include full cover for medical expenses including repatriation costs and accommodation for a relative or friend to stay or escort you home. For Europe, you’d need cover of at least £2 million while for destinations outside Europe this should be £5 million. You should also check to see if the policy offers emergency dental care and a 24-hour helpline for advice and support.
Your insurance policy should also offer cancellation charges if you can’t travel because of unforeseen circumstances such as a bereavement or redundancy. This should be at least £3,000 although make sure that the policy covers the full price of the holiday and don’t overinsure if your holiday cost much less.
Your travel insurance should include full cover for medical expenses including repatriation costs and accommodation for a relative or friend to stay or escort you home.
Your cover should be at least £1,500 for lost or stolen possessions but check to see if there’s a cap on claiming for an individual item since this could be as little as £200-£500. If this is the case, check your home contents insurance policy to see if these items are covered when they’re taken out of the home and/or abroad. Think carefully about whether it’s worth taking expensive jewellery with you and if you’re planning to take electronic equipment such as a laptop or top-of-the-range mobile phone, see if a specialist gadget or stand-alone mobile insurance policy works out cheaper for you. There should also be cover for lost or stolen cash or traveller’s cheques up to a limit of £200-£500.
Other extras which can be added to travel insurance include personal liability (up to £1 million), personal accident cover and legal expenses. There are also specialist travel insurance policies for certain types of holiday or travel.
Check to see if your travel provider is a member of a professional body like ATOL as you’ll recoup financial losses if the firm go bankrupt.
Compensation from the airline for lost baggage won’t cover you in full for the cost of replacing your belongings.
Good travel insurance should cover your medical expenses (including repatriation), the cost of cancellation and delays as well as lost or stolen belongings/cash.
There are a number of optional add-ons to the standard policy and also specialist policies to cover certain types of holiday.
How does the ATOL consumer protection scheme work?
All members must contribute financially to a protection fund which is managed by the ATT (Air Travel Trust) and is used to recompense or refund those who have booked their holidays through a company that went bust.
How do I know if my holiday provider is a member of ATOL?
Member firms are required to display their ATOL licence on their website as well as on their brochures. When you pay money for air travel (even if it’s only a deposit), you’ll be given an ATOL certificate with all the firm’s details including their ATOL number.
What isn’t covered by standard travel insurance policies?
You aren’t covered for extreme sports and winter holidays. Your policy won’t pay for medical treatment if it was preventable by vaccine or advisable medication (such as anti-malarial tablets) or for any medical costs incurred after you were advised to return to the UK. No policy will cover you if your destination isn’t recommended by the FCO out of security concerns.
What specialist travel insurance policies are there?
You’ll need specialist travel insurance if you have a pre-existing, recurring or current health condition. Other specialist types of travel insurance are if you’re planning to go on a cruise (due to possible difficulties in transporting you to hospital) and ‘Winter Sports Cover’ (for skiing and snowboarding). Finally, for travel of an extended nature, you might need Backpackers or Gap Year insurance cover.
What kind of travel insurance to buy
The type of travel insurance you should buy depends on 3 factors: how many trips you take in 12 months, where you are going and who you are travelling with. Let’s consider these factors in detail and point out what to be wary of when buying insurance cover.
Instead of buying separate travel insurance for every trip you take, it works out cheaper for frequent travellers to take out an annual multi-trip policy. It’s also useful if you often have to travel at short notice. You should check the policy for the age and trip limits since many have a limit on the policyholder’s age or on the number of days it covers in a year. This type of insurance might not be cost-effective, however, for older travellers and those with medical conditions. You should also check to see if this type of insurance is auto-renewed; if so, you should receive notification 21 days before it lapses so you have the chance to cancel your policy if you wish to.
Your travel destination also has an effect on the price of your insurance premiums. Cover for European destinations tends to be cheaper then worldwide cover to reflect the cheaper costs of medical care on the continent. Some insurance providers will also waive the excess you pay if you choose to be treated in European state-run hospitals instead of private clinics. Be careful if you choose to travel to Northern Africa. Some insurance companies put these countries under the umbrella term of Europe whilst for others, you have to purchase worldwide cover.
If you’re travelling with a partner, you will save money if you take out a joint policy. If you wish to buy joint multi-trip travel insurance, make sure that the policy is still valid if you travel alone on one trip. Family travel policies are also available but you should check the definition of family with your insurance provider and make sure you have access to all their medical details so your policy can’t be cancelled for inadvertently not making a full disclosure of their medical history.
For both joint and family travel insurance, you should also check the way that the excess (your financial contribution to any claim) is calculated because some charge an excess per person even if you make a joint/group claim.
Travel insurance for domestic holidays
In a survey by ABTA, 65% of UK residents said that they didn’t take out travel insurance for domestic holidays and 70% believed it was more important for foreign holidays. Are they right – is travel insurance worth it if you’re planning to stay put for your holidays?
Of course the main difference between holidays abroad and those in the UK is that you’ll have access to the NHS wherever you go on your trip in the UK. Therefore, you wouldn’t need the amount of medical cover that is necessary when you go on a trip overseas. But what would happen if you were injured and wished to be transferred to a hospital nearer your place of residence and what about the accommodation expenses of having a relative/friend on hand?
As we’ve seen in our examination of travel insurance, a medical emergency isn’t the only thing that could go wrong when you go away. If you’re going to stay with family or friends, travel insurance might not be needed but if you’ve booked accommodation and possibly pre-booked visits to attractions, you could be left out of pocket if events beyond your control mean that your trip has to be cancelled.
The main difference between holidays abroad and those in the UK is that you’ll have access to the NHS wherever you go in the UK.
Before you take out travel insurance, see whether you’re already covered by other policies. For example, you might be able to claim for lost/stolen personal possessions under your home cover policy while breakdown cover might pay for overnight hotel accommodation if your car breaks down.
Multi-trip travel insurance works out cheaper for frequent travellers but you should check the age/trip limits.
Insurance policies for short-haul European destinations have cheaper premiums than worldwide cover.
Travel insurance is often more economical for couples and families but you ought to check the terms, amount of excess and fill in all their details accurately.
Many people believe travel insurance is unnecessary for holidays in the UK because of the accessibility of the NHS.
You should take out travel insurance for domestic holidays to cover financial loss because of cancellation and check other policies so you don’t double up on cover.
Do you already have travel insurance?
Before searching for travel insurance, check to see if you already have it through your bank account or credit card. If you have, don’t just cross insurance off your holiday checklist without reading the terms and small print carefully. Some credit card providers, for example, offer personal travel accident cover instead of comprehensive cover. This means it only provides cover for bodily injuries abroad but doesn’t pay for the full costs of medical treatment, costs of extending your stay and your repatriation. Sometimes the policy is too standard to meet your needs. It’s worth asking your bank or card provider if you can extend your cover for a small surcharge.
Where to purchase travel insurance
The main advantage of buying travel insurance from your travel provider is that you can take out the policy as soon as you book your holiday and/or pay a deposit, which means you’re covered for the possible cancellation of your trip right from the beginning. If you find that the insurance is too expensive, you can shop around to find a cheaper policy but don’t choose a policy on price alone without checking what exactly you’re covered for.
According to ABTA, travel agents sell less than 17% of travel policies so many travellers look at alternative insurance providers such as supermarkets, department stores, the post office and of course online. Like any online price comparison for insurance, make note of your excess and how it’s calculated and check that the amount of cover meets your needs.
How can I reclaim money spent on medical treatment using me EHIC?
You should make sure you keep all the receipts and make a claim from the Department for Work and Pensions. Go to the website for government services.
Can I buy travel insurance if I’m pregnant?
If you’re pregnant, you’ll need a specialist policy which covers any pregnancy-related medical care as well as if you need to change the date of your return journey. Many insurers will request a ‘Fit to Fly’ certificate from your GP or midwife, without which your claim will be invalid.
How many skiers/snowboarders take out ‘Winter Sports Cover’?
According to ABTA research, 30% of people who do winter sports take out no travel insurance.
Are there any circumstances when I’m not protected by ATOL?
You aren’t protected by ATOL if you buy a scheduled flight and receive confirmation within 24 hours. Also, you aren’t covered if you book and pay an airline directly for the flight.
Why don’t some travellers take out travel insurance?
Sometimes travellers don’t take out travel insurance as they’re misinformed about the help they can receive from the FOC or what their EHIC covers them for. According to ABTA research, 31% said that they didn’t take out a policy as they thought it was too expensive. Referring to the cost, ABI has commented that Britons spend more than double the cost of a single-trip insurance policy at the airport on magazines and sweets.
Making a claim on your travel insurance
To make it easier to contact your insurer in case you need to make a claim whilst on holiday, it is best to take your insurance documents with you. In this way, you have your policy number and their emergency contact details.
If you have lost or had possessions stolen, this should be reported to the police as soon as possible because your insurance provider will need written confirmation of the loss (with a crime reference number). If the police station is too far, make an interim report with the help of your hotel manager or holiday rep.
You should make your claim as soon as you can since some insurers impose time restrictions about when claims must be made. If you need medical care, check with your insurance company before beginning treatment (unless it’s an emergency of course).
If you’re delayed at either end of your journey, don’t forget to keep receipts for food, drink and accommodation as you will need proof to receive a refund. See if you can get written confirmation of the delay from your flight or tour operator whilst still at the airport. If your flight is cancelled, you still need to check in to be entitled to compensation. For lost luggage, your expenses will be covered for only the most essential items.
You might already have travel insurance with your bank or credit card provider but make sure the terms of the policy meet your needs.
Travel insurance can be purchased from many places including supermarkets and online but you should buy it as soon as you make a booking so you’re covered for cancellation.
You ought to take your insurance documents with you on holiday so you can contact your insurer.
Make sure you’re aware of time limits for making a claim on your travel insurance and if necessary, provide proof of delayed journeys, police crime reports and receipts.
Insurance when travelling by car
You might decide to drive to your holiday destination or you might want to hire a car whilst on holiday. What should you bear in mind when driving outside the UK?
Driving your car in Europe
If you’re planning to take your own car to Europe, your insurance policy usually gives the minimum legal requirement in each country automatically. However, you should contact your insurer to make sure that you have the same level of cover since it might drop to only Third Party. If necessary, you may have to extend your cover to include damage to the car and theft. Check the number of days you’re entitled to drive since you might not need full cover of 90 days if you’re only going for a fortnight. It might be advisable to take out separate breakdown cover for Europe too.
Hiring a car on holiday
When hiring a car, you should check what insurance is included in the car hire contract. Depending where you’re driving, you are legally obliged to have 3 basic types of insurance: vehicle theft cover, collision damage waiver (for damage to the vehicle) and third party cover (for injuries and damage to a third party).
Before taking the car, you should inspect the vehicle thoroughly – both inside and out – to make sure that you won’t be charged for damage to the car which was present before you hired it. Report any scratches to the hire company and if necessary, take photos with your smartphone in case there’s a later dispute.
Excess on damage to hire cars can be as high as £500-£1,500 so you should consider getting excess reimbursement waiver/insurance, which will enable you to reclaim this money. This can be purchased before you go on holiday at a much cheaper price and you can choose a daily or annual policy. Many hire companies will attempt to sell you a similar policy (called super collision damage waiver, deductible cover or non-waiver cover) to reduce your excess to zero. However, these insurance policies from car hire firms are considerably more expensive and often have many exclusions so they aren’t good value for money.
What should I do if my travel insurance provider rejects my claim?
You should write a formal complaint explaining why you think their decision was unfair; they have 8 weeks to reply. If their answer is still negative or they don’t reply, you have 6 months to contact the Financial Ombudsman Service as part of an appeals procedure by an impartial third party.
Am I covered to drive in the Republic of Ireland under my UK policy?
You should contact your insurance provider. Although some companies treat the Republic of Ireland as the same as the UK for insurance purposes, others treat it as part of Europe.
Can I get excess reimbursement insurance for any hire vehicle?
No. You aren’t usually covered for luxury vehicles or camper vans.
What exclusions do car hire policies, such as deductible cover, have for covering my excess?
Unlike policies purchased beforehand, such policies usually exclude theft, vandalism, damaged tyres, lost keys and use of the wrong fuel.
What should I do if I find the hire company use my credit card details to take money for ‘damage’?
You should always watch your credit card statements for such withdrawals after hiring a car. If you find they have done this, you should contact both the hire company and your credit card provider. If necessary, supplying proof in the form of the photos you took of existing damage.