How to buy: Travel Insurance

Remember the old adage – it’s better to have it and not need it than need it and not have it? Never truer than when applied to insurance, especially travel insurance. But what do you need? The travel insurance market can be a little confusing, so Kelly Ostler of the Association of British Insurers gives Cloud Nine the benefit of her expertise.

If you’re reading this article, the chances are you’re jetting off on holiday. You’ll have thought about many things: location, accommodation, price, what new clothes to buy. But travel insurance is usually near the bottom of the list. This year, Britons will take more than 60 million trips abroad, yet worryingly, nearly three million people will travel without insurance.

Students, backpackers and people taking city breaks are most likely not to cover themselves against unforeseen holiday mishaps. While most holidays are great experiences, if the unexpected happens it is not only upsetting, but without travel insurance, it can be very costly. Association of British Insurers’ data shows that the top three reasons for claiming on travel insurance in 2006 were:
1. medical expenses;
2. baggage and money
3. cancellations

Of these, by far the most costly is medical expenses, for which insurers paid out some £166 million in 2006. In 2006, one in 15 people travelling abroad with travel insurance made a claim. Although a depressing thought, it highlights the need to ensure that you are adequately covered before leaving home. Purchasing travel insurance should take more thought than just ‘which is the cheapest?’ It is crucial that the cover you buy is the right package for you. Will it cover your new digital camera or your designer sunglasses? You also need to think about the type of holiday you are going on: will you be taking part in activities like bungee jumping, water or winter sports, or diving? Always check with your insurance company that you are covered for any activities you are planning to take part in. It is also worth considering taking out an annual policy if you are likely to travel abroad more than once in a year. This can save you money and is one less thing to think about every time you go away.

When applying for travel insurance it is vital that you give your insurance company all the information they need. Omitting details about pre-existing medical conditions could invalidate your policy. Shop around – the market is highly competitive – but don’t automatically go straight for the cheapest. Choose a product that has cover for all your needs. The earlier you purchase your travel insurance the better - amazingly, the third biggest reason for travel insurance claims is for cancellation of holidays before they even begin. Cover for medical expenses following a terrorist attack is now widely available. So if you want to ensure you are covered against acts of terrorism you should check that your policy includes this provision. Some credit card companies provide travel insurance cover free for their cardholders. If you have this, check carefully to see what’s covered and what isn’t – it may be that an additional, more comprehensive policy is needed. The good news is that statistics prove most people enjoy a stress-free time on holiday without ever having to claim on their policies. However, ensuring that you have adequate travel insurance should give most travellers peace of mind, knowing that their financial worries will be taken care of and the blow will be cushioned if anything does go wrong.

Things to remember:

• Ensure you understand what you’re covered for and what you aren’t. If anything is unclear, check with your insurer before you travel.
• Take a copy of your policy with you, along with contact details of your insurance company.
• Where possible, always call your insurance company if you’re arranging something that could form part of a claim.
• Keep all bills and receipts that could support a claim.
• Never leave possessions unattended, particularly at the beach or the airport.
• Always act in a responsible way and take reasonable care of yourself and your valuables.
• Enjoy yourself on holiday but be careful when drinking alcohol. Your policy is likely to exclude any claims involving alcohol or drug abuse