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Guide to travel insurance

When travelling abroad, there are all sorts of things that could go wrong; from cancelled flights to falling ill or sustaining an injury. The cost of these problems can soon add up and eat into and beyond your spending money. However, a travel insurance policy can protect UK families on their holidays.

Many people view travel insurance as a luxury add-on, or something that doesn’t need considering until the last minute. However, purchasing an adequate travel insurance policy is essential. It might end up being the most important thing holidaymakers buy before jetting off as it could save money as well as come to your aid in times of distress.

What is included with Travel Insurance?

The cost of travel insurance can vary significantly as policies from different insurers and can cover different things – some will also give the opportunity to purchase add-ons. The most important features to look for in a travel insurance policy are:

Cancellation: it’s important for holidaymakers to think about what they would do if they had to cancel or cut their holiday short? Having the ability to get home or getting a refund is essential. It’s generally recommended that policyholders seek £3,000 cover, or the cost of the holiday so they are not left out of pocket.

Delay: frequent travellers will know of the problems that delayed flights can cause. Travel insurance should pay out in the event that flights are delayed for 12 hours or more. However, the airline might have to confirm the delay in writing.

Medical cover: the most important feature of any travel insurance policy is cover for medical expenses. In the UK, people can receive treatment on the NHS, but this isn’t the same anywhere else. In general, around £2 million medical cover is recommended, but £10 million for those travelling to the US and Canada.

Personal belongings: holidaymakers that have had their baggage turn up in a different country to their destination will know the importance of this cover. In the event that belongings are lost, damaged or stolen, policyholders will be able to claim.

Different types of Travel Insurance?

Travel insurance can vary considerably, with some policies tailored to suit individuals and others are standard. In any case, there are a number of different types of policies which include: single, annual and extended trip, as well as European, USA and worldwide cover.

Single, annual & backpacker: for families that travel abroad at least a couple of times a year, it often works out as more money to buy separate policies. This is where annual travel insurance comes in – it provides the same cover for 12 months. However, for those that only get away every few years, a single-trip policy will be adequate.

There is another option called backpacker or extended trip travel insurance, which is designed for people that plan on travelling for longer period. Most standard policies only provide cover for up to 30 continuous days – even annual cover.

Family cover saves you from buying individual insurance policies for each member of the family, which can end up being quite expensive. Most insurers will provide the option for cover for the family as a whole. This often works out as young children may be included for free. However, it’s important to double check the term of the excess.

European, USA & worldwide: Most insurers have different travel insurance policies depending on where the policyholder is travelling. For those going to Europe, a standard European-only cover is adequate and usually the cheaper option.

However, those intending on holidaying further afield will need worldwide cover, some might include the US, but others won’t. There tends to be a specific policy for the US because of the cost of healthcare in the country. If the policyholder becomes ill or injured in the US, the cost of medical expenses can easily run into thousands of pounds.

Is Travel insurance required for those with an EHIC?

The European Health Insurance Card (EHIC) allows people to receive medical care in state run hospitals in any EU country. Anyone travelling to Europe should have a card as it is very helpful in an emergency. However, travel insurance is still required as the treatment may not necessarily be free.

What is paying excess?

Travellers that have other insurance policies will be familiar with the idea of paying excess before making a claim. For example, should the claim be £300, but there is £50 excess, the insurer would only pay out £250.

However, the excess can be slightly different on travel insurance. Some providers charge an excess per item or section. So, it’s possible for one person to pay an excess for both medical expenses and personal belongings.

For policies that cover more than one person, such as family travel insurance, the insurer may require each person to pay an excess. Where possible, it’s often better to take out a policy with one all-inclusive excess per claim.

Always check existing cover before taking out a new one

As with any purchase, it’s worth comparing policies before purchasing as they all offer different features and premiums can vary significantly.

However, before searching for travel insurance, holidaymakers should check to see if they already have cover. Some home contents insurance policies may already cover personal belongings away from the property.

Those people that pay a monthly or annual fee for their bank account may also receive travel insurance as a free gift. There is no point paying for a policy when already insured, but it is important to check the level of cover offered.