Travel Insurance

The Basics Of Travel Insurance For British Travellers

A woman who is traveling takes pictures at a train station

According to the ABI (Association of British Insurers), over half a million Britons made a claim on their travel insurance in 2017. 52% of all claims, worth on average £1,300 each, were for medical expenses followed by over a third (34%) for claims related to trip cancellation. In total, British travel insurers paid out £385 million. In this article we discuss:

  • What travel insurance is
  • If you need travel insurance
  • How much travel insurance costs

What is travel insurance?

Travel insurance is a policy which protects you from financial loss if something goes wrong on the way to/from your travel destination or whilst away. It can be purchased for both domestic and foreign trips. It is also suitable for both recreational and business trips – however long their duration.

British travel insurers paid out £385  million in claims throughout 2017

Policies vary in their provision, but they typically cover you for:

  • medical emergencies, treatments and repatriation to the UK,
  • the cancellation of trips due to circumstances beyond your control,
  • the loss or theft of belongings in transit or while away.

Do I need travel insurance?

If you have insurance as an add-on to another financial product (such as a bank account), you should always check its terms and conditions carefully. Many such travel insurance policies have age limits, exclusions and/or limits on pay-outs. As a result, it might be a good idea to take out a stand-alone policy as well. Your home contents insurance policy might also cover you for the loss or theft of belongings that are regularly taken out of the home. However, you should check that you’re covered for foreign trips as well.

A woman is shown contacting her insurer on her phone from the airport because of a delayed flight

Some travellers believe that an EHIC card is sufficient cover when travelling in Europe as it gives them access to free medical treatment. However, this card doesn’t cover repatriation to the UK which can cost thousands of pounds, nor does it cover the cost of medical treatment outside the EU. In general, travel insurance is highly recommended wherever you go. Could you afford to pay if you had an accident, or your trip was cancelled?

How much is travel insurance?

One of the factors which affect the price of insurance is the excess, which is your financial contribution to any claim. This is typically £50-£100 for travel insurance. Generally, the higher your excess, the lower the cost of your insurance. Apart from the excess, how much you pay for insurance depends on other key factors such as:

Where you travel – coverage for European destinations is cheaper than the US.
Your age and/or pre-existing medical conditions.
How often you travel – an annual multi-trip policy works out cheaper if you travel regularly.
Your activities while away – travelling on a cruise ship or engaging in risky activities like scuba-diving will increase the cost of your insurance.
How many people on the policy – cheaper insurance is available for couples, families or groups.
The type of holiday – independently-arranged travel is more expensive to insure than package holidays.

About the author

Thomas Henderson

Thomas worked as a consultant in personal finance in the UK for 18 years. He has found a passion in sharing his experience on familymoney.co.uk

Thomas also takes pleasure in woodworking, reading and observing stock market trends.

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