Travel Insurance

Travel agents often make more money selling insurance than holidays. If you already know this, it’s likely you have an annual travel policy, yet you may still be paying over the odds. This is a full guide to the cheapest travel insurance, including a comparison of over 50 providers, for singles, families and the over 65s.

• Annual or single trip?
• Grab an EHIC card
• Best Buys: The cheapest policies
• Annual: Individual policies from £15
  
• Annual: Couple/family policies from £24
  
• Annual: 65+ policies from £45
• Single trip policies
  
• Cover for pre-existing conditions
• Get the right cover
• Other Articles/Discuss

There are two types of travel insurance policy, and both can be good value in the right circumstances:

• Annual multi-trip travel insurance.

  This covers all trips during a year for a one-off fee, within a set maximum number of days away (usually between 30 and 60). Trips are mostly defined as business or travel overseas (even a day trip), or more than two consecutive nights away in the UK at prepaid accommodation starting the moment you leave until the moment you return.

  Winter sports may be included, usually for a limited number of days, though do check it covers equipment and any more unusual sporting pursuits.

• Single trip travel insurance.

  This has been given a bad name due to over-expensive travel agents’ policies. Actually, do it right (see below) and it can be good value, just a few pounds for a week away.

The rough rule of thumb for this is:

Stay in Europe and annual policies are cheaper if you go away more than twice, including weekend breaks; outside Europe it's more than once.

The exception to the rule

For those tripping to the USA an annual policy may be cheaper than single trip cover and often is cheaper than cover for two single trip policies.

USA cover is expensive because of the high medical costs, but annual policy prices are calculated on average trip demographics (roughly one long haul and one short haul week away). Therefore USA go-ers grabbing annual policies are effectively being subsidised by people heading to medically less costly destinations.

The free European Health Insurance Card (EHIC) replaced the E111 form in 2005 and entitles the holder to free or discounted medical treatment in state run hospitals in any EU country plus Iceland, Liechtenstein, Norway, and Switzerland. If you’re travelling to Europe you should ensure you’ve got a valid one as it means you’re treated like a citizen of that country, which is extremely useful in emergencies.

It’s completely free to get one, go to the EHIC website, any Post Office or call 0845 606 2030.

Does it make treatments free?

No. Effectively it means you get treated the same way as a citizen of that country. So if they get free medical treatment you do too; if they pay, you pay the same rates. This is a reciprocal agreement across Europe, so EU citizens can use the NHS in the same way.

Yet do ensure you’ve got the card with you at all times, as rather absurdly the terms stipulate that you won't be covered if you haven’t got it (so take it to the beach if you have to too).

Can it be used as a substitute for travel insurance?

No. While very useful, it’s only about medical cover. It doesn’t cover baggage, holiday cancellation, repatriation if you’re dead or any of the other things you might take cover out for. Plus you’ve only got access to state run hospitals which, depending on where you travel to, can be few or far between, and more limited.

What’s more, you may have to pay for treatment even with an EHIC card (though it’ll usually be discounted). You’d be covered for this extra expense with travel insurance but having the EHIC too may mean you needn’t pay the excess.

Check it hasn't expired.

EHIC cards expire after three or five years, and the expiry date is listed on the bottom right of the plastic. It’s thought up to three million people are carrying now expired cards, so it’s crucial to ensure yours is valid and sort one before going away. You can apply for a new card up to six months before the current one ends.

It's important to find a policy which suits your needs, so ensure you carefully check the cover levels. Here are some other things to consider...

• Annual Policy Tips.

  If you're going for an annual policy, defining the cover is important.

  Family insurance is cheaper. Combined insurance for a couple or family usually costs less as the risks increase more with ‘each trip’ than 'each person'. However some policies don’t cover individual family members, and those that do may require notifying first so always call and check.

  Europe-only cover is cheaper. If you’re unlikely to venture further afield, pick European only cover. You should be able to extend the territory if necessary.

• Scheduled Airline failure cover.

  Most travel insurance policies won’t pay if you’re caught out when an airline goes bust. A few do include ‘Scheduled Airline Failure Insurance' (SAFI), but they can be expensive and are often unnecessary. For package holidays, provided your agent's a registered travel agent with ATOL, you’re entitled to a full refund anyway (read more about ATOL protection).

  Alternatively, book a ticket costing over £100 and pay for some or all of it by credit card, and the Section 75 law means the card issuer is jointly liable if things go wrong, so if a retailer goes bust, you can still claw the cash back from it. Though do pay the card off in full at the end of the month so you’re not charged interest.

  If that doesn’t apply, it's possible to cover single trips from £5 per person using ProtectMyHoliday*, which used to only sell SAFI via travel agents, but now allows you to buy direct online. As well as airlines, this covers accommodation suppliers, car hire companies, ferry operators, train companies, excursion providers, and theme parks. Nonetheless, it's only worthwhile if you don't fly away too often (once or twice a year max).
  
  For more regular travellers, the cheapest full annual policy provider which includes SAFI is Multitrip*, at £21.99 for a 'Premier' European policy. While Karma Insurance costs £39 for a European policy, its SAFI will also cover you for hotel, coach and ferry companies that go kaput. To get this price, you have to de-select the extended legal cover it offers, but I've been assured this has no impact on the SAFI, or the rest of the policy.
  
  For more options, do a comparison on TheIdol*, which clearly indicates which insurers cover airline insolvency in its results.

• Don’t rely on credit card insurance.

  There’s a lot of confusion about credit card travel insurance. Often it’s actually only travel accident insurance, which only covers accidents had while in a train, plane or hire car paid for on the card, so never think this means you're covered.

  A few platinum cards or bank accounts do genuinely offer free travel insurance, though the cover levels are usually poor and you often have to pay both the deposit and the full holiday cost on the card or you’ll fall foul of their conditions. Always check before relying on this.

• What to cover?

  Many insurers will try to flog you policies with unnecessarily high limits. Yet don't be duped into these; there's no point in paying for medical expenses cover for up to £200 million, £2 million is adequate. Personal liability cover should be £1 million and make sure you have cover for cancellations and curtailments, luggage and possessions possibly including lost cash, legal expenses and delay.

An insurance policy that doesn't pay out when you need it to is about as useful as a chocolate teapot. Thus, once you've found your cheapest policy you need to check it's right for you.

• Want winter sports cover?
  
  You shouldn't rely on an EHIC card when skiing in Europe, as most clinics in the resorts are private. All budget winter sports policies should cover basics for both skiing and snowboarding like equipment (both hired and bought), piste closure and avalanches, but if you're into a more niche or extreme winter sport take care.
  
  Fans of bobsleigh, luge, ski jumping, ski racing and ski stunting/acrobatics are usually excluded by budget policies, so will need to opt for a specialist policy (try the BMC). It's also worth noting most policies won't cover competition entrants, or anybody skiing or snowboarding outside of recognised areas.
  
  
• Is it a package or DIY trip?
  
  Most travel insurance policies are designed to cover packages, as ten years ago that's how 90% of us booked trips abroad. Yet while times have changed, many policies haven't, and this is problematic because it leaves them ill equipped to cover DIY holidaymakers, who book flights and accomodation from different places.
  
  The biggest DIY issue is a lack of cover for knock-on consequences. If you take a policy with cover for Scheduled Airline Failure, for example, and the airline goes under, you'll be able to claim for the flights, but if you can't reach your destination you'll lose the money you paid for the accommodation. The only way round this is to find policies which specifically cover 'indirect loss' - check the small print.
  

  For maximum cover, look for special 'independent traveller' policies, which are increasingly available though cost a bit more than regular policies. Do remember though package holidays innately have the extra ATOL and ABTA protection, which you won't get if you book the component parts of your holiday from different places.
  

• Where are you going?

  Even if you're getting an annual policy, think about where you're likely to go throughout the year; if it includes a country with poor medical facilities, make sure your policy will cover full repatriation costs. Also read the Foreign & Commonwealth Office's Travel Advice By Country web page, which indicates those areas deemed unsafe and hence not covered by insurers as standard.

• What are you doing there?

  One of the most common reasons claims go unpaid is failure to disclose information about (especially hazardous) activities. If you've any specific activities planned, declare them first and make sure they'll be covered.

• Is there a 24hr hotline number?

  Due to time zone differences, access to a 24hr claim line is more necessary than many think. Most insurers now offer one, just make sure you've always got the number written down somewhere close to hand in case of emergencies.

• Take 'reasonable care'.

  All insurance policies are based on you taking what they deem 'reasonable care' of your possessions. If you've left a bag unattended and it gets stolen, then don't expect a payout; from the insurer's perspective it was basically your fault for being reckless. Thus, take all the precautions you can and treat your gear as if it isn't insured. Don't give insurers a chance to deny your claim!

• Look out for exclusions/excesses.

  At least as important as cover levels is taking note of policy exclusions and excesses, which can vary quite widely between insurers; it's a case where reading the small-print, whilst time-consuming, can pay dividends. Make sure it's decent and correlates well with your travel habits.

• Don't over cover. While not as dangerous as under-covering, over-covering's still an unnecessary strain on the pocket. Ignore the hype...

Don't upgrade for no reason. Super-high Platinum policies with £200m medical cover are bunkum; claims aren't that high, so you're charged more without getting more.

The chances of you using the extra cover are generally slimmer than Kate Moss on a diet. For most holidaymakers (at least, less 'extreme' ones), the following cover levels should be more than ample:

Minimum Cover Levels

When you get any travel insurance policy its crucial to check what is included. Below is a guide to the typical amounts you'd expect to be covered in each category.

• Medical: £2 million.

  This is usually more than enough to cover your medical expenses, wherever you may find yourself. Only in the US will claims of this height ever usually be realistic. If you're planning to go to a country which has poor medical facilities, ensure your policy will cover repatriation costs.

• Personal liability: £1 million.

  This pays out for damage to other people and their property. Again, whilst some insurers'll happily insure you for £10 million's damage at a premium, are you really likely to cause so much trouble? If so, maybe you should think twice about holidaying in the first place, or even just leaving your house...

• Baggage: £1,500.

  Obviously, the level of baggage cover you should opt for depends on how much your baggage is actually worth. Most cheaper insurers will include baggage cover up to £1,500 at a small cost, which ought to sufficiently cover most holiday luggage. However, you may be able to do without it at all; many household insurance policies (see the Cheap Home Insurance guide) will also cover all your possessions when they're abroad, so if you've got one, check it first.

• Cancellation/Delays.

  If you go on high value trips, make sure this equals the cost of the trip you've planned. Nothing's more crushing than missing out on a dream holiday for reasons that can't be helped, yet still paying for it. However if you tend to travel on budget airline flights and cheap hotels, then this is often less important. (see the Swine Flu Travel guide for how it may impact your holiday)

The figures above are guidelines only; obviously if you're planning a naked volcano-bungee expedition you'll need a more expensive specialist policy which'll cover your perilous kamikaze mentality.

Family insurance from a travel agent could be as high as £60 for a week’s European holiday and £150 for a fortnight’s long-haul. Taking two European breaks and one long haul trip a year is £270.

Annual worldwide family cover is cheaper, but there are huge variances in price (and cover levels) even here; while the Post Office charges £126 (£140 offline), Flexicover via MoneySupermarket is just £40.