Everything you need to know about travel insurance

I’ve also noticed a trend in the comments I receive from readers who tell me that they bought travel insurance policies that didn’t deliver. From expensive medical claims to exclusions for natural disasters, this can lead to lost holidays or expensive bills.

Don’t panic! A good travel insurance policy is very much affordable. Here’s my guide on what to look for in a policy.

Single trip or annual policy?

There are two main types of travel insurance policy, though there are significant differences in what different insurers cover or will pay claims for.

Single trip insurance does just what it says on the tin. It’s often cheap and cheerful and often sold alongside travel holiday packages, flights or at airports.

Annual policies are worth it if you’re taking a few holidays in a year and it’s useful if you want to take advantage of those last-minute travel bargains, knowing you’ll be covered. It’s better for long-haul trips too and what it covers can be more extensive.

What ‘key facts’ should I look for?

If you can’t face going through a ton of T&Cs, then it’s vital that you go through any insurance ‘key facts’ document. The key facts document will tell you all the essential things you need to know, so you don’t have to trawl through the entire policy before making a decision. This will include:

• Excess fees: the amount of money that you must pay when you make an insurance claim. It’s usually deducted from your claim settlement figure.
• Policy limits: the maximum amount your insurance policy will pay out when you claim for specific situations and losses.
• Exclusions: things that aren’t covered by the policy.
• Disclosure: things you have to tell the insurance company about to be fully covered.

There are other things to consider too. Make sure you mention if you are going on a cruise, if you have an ongoing medical condition, if you are traveling to multiple countries or are away for over one month (an annual policy will limit a single trip to up to 31 days).

Feeling daring?

If you want to take part in anything even slightly adventurous, consider taking out ‘adventure sports’ cover. You could need this for anything from a ride on a banana boat (medium risk), hiking, (some risk) or quad bike riding (high risk). This is usually available as a ‘bolt-on’ to your policy for a small fee.

What’s cancellation cover?

If something unexpected happens in the run up to the holiday (like the death of a close relative, illness, a significant or unexpected event) then cancellation cover will pay out a sum towards the costs of not being able to travel. This clause will allow you to reclaim the cost of your holiday, though the maximum limit will be capped. To be covered make sure your policy covers you from the day you buy it NOT the day your holiday starts.

What is an excess fee and policy limit?

An excess fee is the amount of money that you have to pay when you make an insurance claim, except it’s usually deducted from your settlement figure.

A policy limit is the maximum amount your insurance policy will pay out when you claim for specific situations and losses.

Here’s how it works in practice: You might have to pay the first £300 of a claim for a cancelled holiday (excess fee). In addition, the maximum policy limit could be £3,000. So if you make a successful claim for a cancelled holiday, the most you could claim for with this policy is £2,700, no matter how much you’ve spent on the trip.

A few last tips!

If you want to come home early, look at the ‘curtailment’ section of the policy. Don’t assume all your valuables are covered. And use the hotel safe if there is one!

Martyn James is a leading consumer rights campaigner, broadcaster and journalist. For more from him visit this link