How to choose the best travel insurance

Travel insurance is the single most important thing you should purchase when preparing for any kind of travel or holiday, but it is also something you never hope to use.

I didn’t have travel insurance when our passports were stolen and I broke my foot in Paris on our honeymoon in 2012. As a result, we had to pay €2,000 for medical treatment and more than £400 to replace two passports and our working visas.

Luckily, a couple I know did have travel insurance on their recent trip in North America. First, they were both evacuated off their cruise ship so that one could seek medical attention. And then, the other was hit by a car a few days later, underwent emergency surgery and was escorted back to Australia by a nurse. Their travel insurance will hopefully help pay for legal assistance as well as long-term medical treatment. They found out the hard way that the US can be one of the most expensive places in the world to seek medical attention – which is why you should never travel anywhere without the right travel insurance.

Choosing the right travel insurance can often be confusing and complex, so it can be hard to know where to start.

Let’s have a look at why you might need travel insurance and how to get the best cover for you and your travel companions.

Firstly, is travel insurance necessary?

Yes, absolutely.

Will you use it?

Probably (and hopefully) not.

Then, why do you need it?

Travel insurance is there to help and protect you in an emergency situation, and to cover you financially if you are involved in an accident, your trip is delayed or cancelled, you need to fly home in a hurry, or you fall ill unexpectedly.  It is not purchased to cover small items, like a stolen beach towel.

When should I purchase travel insurance?

You should purchase travel insurance as soon as you have paid for any flights or accommodation so that you are covered if something happens to prevent you going on your trip.

Insurance comparison sites such as Direct Travel Insurance, Money Supermarket, Compare the Market, and Confused will help you compare prices and policies to find the best travel insurance policy.

How does insurance work?

Find an insurance policy that will cover you for all that you need and for a price that is within your budget. Then, contact the insurance provider (online or over the phone) to purchase the insurance policy.

You pay the insurance provider the “premium” and they will provide you with the insurance. Then, if something happens and you need to make a claim against that policy, you will contact the insurance provider and provide them with evidence of your claim (receipts, medical reports, police reports, etc.). The insurance provider will investigate the claim and make a decision to compensate you, or not.

If you make a claim, you will usually have to pay an extra amount called the “excess”. This amount can also be subtracted from any compensation the insurance provider has agreed to pay out to you.

What should I pay for travel insurance?

Don’t choose the cheapest travel insurance option without checking the cover provided. And, don’t assume your travel insurance will automatically cover you for any incident or illness.

Always read the policy details and know what level of cover you are paying for.

You will usually pay a higher premium amount if you want to include:

• countries such as the USA, Canada and the Caribbean
• a pre-existing medical condition
• cover for delay or cancellation due to war or unrest (this will be dependent on country and your home country’s travel advice/restrictions)
• cover for winter sports and equipment (skiing or snowboarding)
• cover for extreme sports such as hang gliding, paragliding and bungee jumping
• cover for individual valuable (£150+) items, such as camera equipment, laptops, mobile phone, etc.

What should my travel insurance policy cover me for?

When you are choosing your travel insurance policy, always look for a policy that includes:

• a low excess (£100 or below is good) in case you need to claim
• a high coverage limit on your medical expenses (at least up to £10mil)
• a high coverage limit on cancellation costs (to cover you for all accommodation and travel costs)
• a decent coverage limit on lost, stolen or damaged baggage (at least up to £1,500)
• coverage for personal accident costs (to cover death or disability up to £15,000)
• a decent coverage limit on passport and travel documents (enough to cover all costs if your passport was lost or stolen)
• decent cover for personal liability (up to £2mil).

If you want more comprehensive cover, also look for a policy that includes:

• cancellation or curtailment
• delayed departure or abandonment of trip after delay
• legal expenses and assistance (up to £15,000)
• missed departure on your outward journey.

What’s in the fine print and do I have to read it?

Yes.

Always see the policy wording and product disclosure statement for full policy terms so that you are not caught short if the worst should happen.

Failure to comply with all important conditions in the policy wording may jeopardise your claim or cover (which would be a terrible waste of your time and money!).

While many travel policies will provide you with the protection you need (medical, travel delays, cancellation), not all travel insurance policies will cover you for catastrophe insurance (such as a military coup, terrorism, kidnap or acts of war) or end-supplier failure cover.

Some policies require you to start and finish your travels in your country of residence, while others will allow you to begin your insurance cover at any time throughout your trip. It is better to be covered from the moment you purchase your flights or accommodation, just to be safe.

What am I not covered for?

Some travel insurance providers will not cover private medical healthcare or costs if you can receive public healthcare cheaper or for free, mountain rescue or ambulance travel in ski resorts (this can usually be added), being flown back to you home country for treatment, or lost or stolen property from a vehicle. And, it may not be valid on cruises.

You will not be covered for any unlawful actions and any criminal proceedings brought against you.

Even when you choose to add extreme activities or sports activities to your travel insurance policy, you still might not be covered for personal accident or personal liability claims while participating in these activities.

Travel insurance policies will also not normally cover alcohol- or drug-related incidents, or carelessness in handling your possessions and baggage. It is up to the travel insurance providers’ discretion in deciding what is acceptable and what will be covered (if anything) in these circumstances.

What is a pre-existing medical condition?

You must be upfront with any and all pre-existing medical conditions. If you do not declare medical conditions this could invalidate your policy.

Examples include any condition you have been admitted to hospital for in the last 12 months, diabetes, high blood pressure, depression, respiratory conditions (including asthma), heart conditions, allergies, permanent or temporary disability, IBS or any other chronic illnesses you take regular medication for.

It’s best to speak with your insurance provider before you purchase the policy to ensure you are getting the right medical cover.

Note: the medical portion of travel insurance is to cover you for emergency care only. It is not a replacement for your normal healthcare and it will not cover you for general check-ups or refilling your prescription.

And, if you are a UK resident, it is important to have both an European Health Insurance Card (EHIC) and a valid private travel insurance policy in place before you travel. Some insurers now insist you hold an EHIC, and many will waive the excess if you have one.

What if the insurance policy is not enough to cover my valuables?

If you’re like us, sometimes you can be travelling with valuables that are worth more than the single item cover limit. This might include expensive cameras and lenses, laptops, musical instruments and sporting equipment.

Sometimes, you can ask the travel insurance provider to provide specified valuables insurance to cover these items for their full value. This will increase your premiums.

But, before you do that, consider your other options. Are these valuables covered worldwide under your house and contents insurance? Or, can you pay for individual “gadget insurance” to cover them at home and while you are travelling? These might be more budget friendly options for covering your valuables.

Can travel insurance cover my spouse, family or friends?

If you are travelling with your partner or spouse, it’s usually much cheaper to purchase joint travel insurance that covers both of you, rather than two separate policies. This will also mean that if one person falls ill or is hospitalised, the spouse can be covered to delay their trip so they can stay together.

Some providers will allow groups to purchase travel insurance together. This is good if you are organising a big group trip or excursion and want to save some money.

Ensure the travel insurance provides enough cover for each individual listed on the same policy.

Also remember to include on the policy all dependants travelling with you. This could include adult children.

Should I get annual or multi-trip cover?

It can be cheaper to purchase an annual (or multi-trip) travel insurance policy if you travel regularly for leisure (more than three times a year). Annual travel insurance provides cover for a whole 12 months, but it can impose a cap on the length of each individual trip, usually between 17 and 45 days.

Note that annual travel insurance policies cover you for 12 months from the start date. No cover is given for cancellation until the policy starts, so you should consider starting the policy straight away.

Does travel insurance cover me while I am working abroad?

Some travel insurance policies will include paid and voluntary work, but this may increase your insurance premium and may restrict the type of work you do. Again, always read the policy to ensure you are purchasing the right cover.

What if I am going on an extended trip (more than 30 days)?

“Backpackers” insurance or “Gap Year” insurance is an economical travel insurance option for those that want to go on an extended trip for more than 30 days.

Some backpacker holiday insurance will also incorporate cover for working abroad as well as for a raft of sports and adventure activities that are popular among backpackers (although you should check individual policies as adventure sports can sometimes be excluded).

If planning to work, do read the small print to make sure the type of work you are planning to do is covered. This applies to both paid and voluntary work as well as manual labour.

Some backpacker insurance policies will cover up to two trips back to your home country for a maximum number of days (7 – 14) to cater for those who want to return home for Christmas or a wedding, for example.

What do I do?

Since 2012, hubby and I have resided in the UK and travel for up to four months of the year. And, having learned from our past mistake of not having travel insurance, we now purchase annual travel insurance policies and gadget insurance that will cover us for all of our travel throughout the year.

Every year, we evaluate and shop around for the best coverage at the best price. We have purchased travel insurance through our Barclays bank account, through hubby’s salary sacrifice programme at work, and direct through an insurance company.

In February 2016, we paid just over £180 for a couples annual policy (£50 excess) directly through AllSafe Insurance.

I researched the company and I know that (with the right evidence) they can pay out a claim in under a week and their cover is fully comprehensive. We are now covered worldwide (excluding the US and Canada), for travel disruption and winter sports (including hubby’s new snowboard), and for pre-existing medical conditions (I suffer from IBS). We are also covered for baggage up to £2,000, cancellation costs up to £5,000, medical expenses up to £10,000,000, and trip duration to 31 days.

We have insured most of our valuables through Protect Your Bubble.com. This means that items such as our laptops, cameras and tablets are covered anywhere in the world for accidental damage and theft.

Insurance comparison sites such as Direct Travel Insurance, Money Supermarket, Compare the Market, and Confused will help you compare prices and policies to find the best travel insurance policy.