Holiday insurance guide: Travel insurance

There are a number of things that could happen on your trip that, without insurance cover, could cost you a lot of money. For example, you may become ill and need medical treatment. The costs for medical treatment could run into thousands of pounds and without travel insurance, you would be responsible for paying for your treatment. Purchasing travel insurance means that you can go on your holiday with the reassurance that you have cover.do travel insr

With this in mind, there are two main questions to ask when purchasing travel insurance:

• Which policy type suits my needs?
• What does travel insurance cover?

The extent to which a travel insurance policy covers you differs from policy to policy. This travel insurance guide will outline some of the different types of policies and cover available. For more information on spending abroad, visit our travel money guide.

Types of travel insurance policy

The two most common types of travel insurance policy are annual and single trip travel insurance. Others, such as long stay and winter sports travel insurance, generally apply to specific types of trip. Here’s a quick overview of what is available:

Single trip travel insurance

If you intend to take only one holiday a year, a single trip policy may be the most cost effective solution. The premium is typically based on the number of travellers, intended destination, and the length of the trip taken.

Annual travel insurance

If you intend to take more than one holiday a year, it is usually more cost effective to buy an annual travel insurance policy. There is however, a maximum individual trip duration, which means that cover is provided for a specific period only (typically 31 days for each trip taken). This type of cover can also be known as multi trip travel insurance.

Gap year travel insurance

If you intend to travel the world, a gap year travel insurance policy is essential. These are also known as ‘backpackers’ travel insurance policies and will typically provide cover for up to 365 days. Gap year travel insurance is normally aimed at people under 40, but some insurers may include cover for customers up to the age of 65.

Long stay travel insurance

If you intend to take an extended trip, and are staying abroad for three months or more, it is advisable to purchase an ‘extended trip’ or ‘long stay’ travel insurance policy. Typically, the majority of policies will provide cover for up to 365 days..

Winter sports travel insurance

If you are intending to take a trip that includes winter sports, you will need to ensure that your policy provides adequate cover. Many winter sports travel insurance policies extend the protection provided under the baggage section to include cover for your winter sports equipment. Other features of winter sports insurance can include the ‘ski pack’, which will cover the costs you incur for hire of ski equipment, lift passes and ski school expenses if you are injured or suffer a serious illness.

Piste closure cover provides compensation for the closure of facilities due to adverse weather conditions with £20-£40 per day typically provided for travel expenses to another piste. Avalanche delay provides cover for additional travel and accommodation expenses because of a delay caused by an avalanche or landslide.

You can use Defaqto’s winter sports insurance comparison tool to check you have the right level of cover.

Adventure pursuits

Cover can be provided for unusual or extreme pursuits such as abseiling, ballooning, bungee jumping, potholing and parachuting. However, many of these sports are automatically excluded from a standard policy. Sometimes even mainstream sports such as canoeing, athletics, basketball, scuba diving, judo and karate can be included in this category.

Travel insurance features

The different types of travel insurance mentioned above will have varied levels of cover, so it is worth checking the features and benefits of each policy. However, some of the main features included in travel insurance policies are listed here:

Medical and repatriation expenses

Cover is provided for the costs incurred for medical treatment you receive abroad. This usually includes a 24-hour emergency assistance service, as well as cover for the costs of bringing you home for medical reasons (‘repatriation costs’). The policy limits provided for medical expenses typically range from £1m - £10m.

Baggage and money cover

In this instance, cover is provided for damage to, loss of and theft of your personal possessions. However, policies have varying limits for ‘single items’ and ‘high risk items’ (or ‘valuables’). High risk items are usually defined as items such as photographic equipment, computers, electrical items, mobile phones and jewellery. The typical cover provided for ‘money’ includes loss or theft of cash, bank notes and travellers’ cheques.

Cancellation and curtailment cover

If you have to cancel or cut short (curtail) your trip because of family illness or bereavement, cover is provided towards the cost of the holiday. Cover is also usually included for cancellation because you have been made redundant, have to attend jury service, or your home has suffered serious damage and you need to stay at home.

Scheduled airline failure

Scheduled airline failure covers the cost of cancelled flights due to the airline going bust and being unable to remunerate the cost of your journey. Many people automatically assume they would be covered by their travel insurance, but this is not always correct.

Delayed departure

Most policies will pay compensation for a delay incurred as a result of your trip being delayed due to weather conditions, strike action or mechanical damage to the vehicle you will be travelling in. Compensation is usually provided once you have been delayed for a minimum of 12 hours. Travel abandonment cover, which provides cover if your trip is cancelled due to these factors, is a separate feature to delayed departure.

Missed departure

If you miss your flight because of delay in public transport, a car breakdown or an accident, cover is provided for additional travel or accommodation expenses.

Loss of passport

If your passport is lost, stolen or destroyed, the costs involved in replacing it may be covered by your travel insurance policy. Typical cover ranges from £100-£500.

Terrorism cover

All insurance policies will have certain exclusions for claims from terrorism. Some policies will only provide cover for medical costs incurred from an act of terrorism; others will also include cover for your personal possessions.

Travel insurance advice

• Research your travel insurance at least a week before you go on holiday. Don’t leave it to the last minute, otherwise you might not have time to check whether your policy provides adequate cover
• Even if you are going on a short break, you should consider purchasing travel insurance
• If you are travelling in the EU, make sure you have a European Health Insurance Card, which provides basic emergency medical cover in EU countries and Switzerland. They are free and easily obtained by downloading an application form.
• If you are renewing an annual policy, check the small print in case the policy terms have changed
• If you are eligible for travel insurance with your credit card or bank account, always check that the cover provided meets your needs.

Don’t just use this travel insurance guide to decide which policy you need, as our travel insurance comparison tool also allows you to compare different policies and features.