Insurance Guide

Choosing the right travel insurance

Friday, 26 June 2009 Writes Hazel Cottrell hazel.cottrell@consumerchoices.co.uk

If you are planning a holiday abroad, you’ll want to make sure you’re fully insured...

Anyone who’s had their belongings stolen, lost their luggage, or fallen ill abroad will testify that travel insurance is not an optional extra – it’s a necessity.

You are much more likely to need insurance benefits on holiday than at any other time of the year and travelling without it is a big risk.

Travel insurance can be surprisingly good value if you shop around and in this guide we will look at how to find the most suitable policy at the best price and answer some common travel insurance questions.

• What cover do I need?
• How do I choose a travel insurance policy?
• Should I declare pre-existing medical conditions?
• Do I need an EHIC?

What about credit card travel insurance?

What cover do I need?

You must consider your own individual needs and the specific activities you will be taking part in abroad, but you should ensure that any policy you take out covers the following as a minimum:

• Medical expenses – You’ll need cover for at least up to £1 million, or £2 million if you will be travelling in the US.
• Personal liability – You’ll need cover for at least up to £1 million in case you accidentally injure someone else or damage their property while abroad.
• Cancellations and curtailment compensation – You‘ll need cover that matches the cost of your holiday so that if it is cancelled you will not be left out of pocket.
• Possessions and luggage – Most people will want a minimum of £1,500 but if you are taking lots of items with you, ensure the limit you choose is adequate to cover them. It’s important to check the limit for individual items too and if you plan to take a very expensive item, for example a camera, that is more valuable than the limit, you may have to take out a separate policy to insure it.
• Repatriation - If you are travelling to a country which has poor hospital facilities then make sure your policy covers all repatriation costs. The cost of air ambulance in Europe could run to £16,000.

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How do I choose a travel insurance policy?

The most important aspect of the travel insurance policy that you choose is not the price, it’s the features. It’s crucial to check that the policy suits your individual needs. Some questions definitely worth asking are:

• What cover is offered?
• How much is the excess? (Could you afford this in an emergency?)
• Will your insurer pay upfront or will you have to pay the bill and settle with your insurance company later? (Do you have the spare cash to pay a bill that may run into thousands?)
• Does your insurer provide a 24hour emergency hotline? Most companies do, but it’s worth checking as due to time differences, this can be crucial.

It’s a good idea to shop around and compare insurance policies to find the best deal, plus, if you travel more than twice a year (including short breaks) it’s worth looking at taking out an annual policy as this may work out cheaper.

Often the best value deals are found online. For example you should be able to find a policy insuring a family for a two week holiday in Europe for around £15.

Before you buy any policy, make sure you have checked carefully for any exclusions that may be relevant to your plans – for example, many standard policies won’t cover “hazardous sports”. See our guide to common travel insurance exclusions for others to watch out for.

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Should I declare pre-existing medical conditions?

When taking out an insurance policy it is vital that you disclose any information about pre-existing medical conditions and check that your insurer will cover them. This may cost extra, but if you fail to declare a relevant condition and have to make a claim, it may be rejected by the insurer.

While some insurers will automatically exclude treatment for pre-existing conditions, many conditions such as diabetes or asthma are acceptable to insurers if you tell them in advance.

There are companies which will offer specialist cover to people with illnesses, including cancer and HIV. However, if you are travelling against the advice of a doctor, insurers will not pay out any claims.

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Do I need an EHIC?

If you are traveling anywhere in the EU, or to Iceland, Norway, Switzerland or Liechtenstein then you should definitely get a European Health Insurance Card (EHIC).

You will need one for each individual traveller, including children. You can pick these up free from the Post Office, request them by calling 0845 606 2030 or apply online at www.ehic.org.uk.

The EHIC will entitle you to state medical insurance on the same basis as an “insured” citizen in whichever country you are in. Because of variations between health systems, you may have to contribute to the cost of treatment. However, if you do pay and claim this on your travel insurance, many insurers will waive the excess because you've used the EHIC.

On holiday, ensure you keep your EHIC on you at all times as you will need it immediately if you require treatment.

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What about credit card travel insurance?

Some credit cards offer free travel insurance but you often have to have booked the holiday using the credit card in order to be covered by the policy, so read the small print to find out.

Furthermore, it is “travel accident insurance” that is offered by most cards, which is not the same as regular travel insurance at all - it only provides very limited medical cover and only covers you if you're seriously injured in an accident while actually “travelling” i.e. on some form of transport. It doesn’t cover you for any other accidents or illness and provides no cover for possessions or money.

A few credit cards do provide more comprehensive travel insurance (for example the American Express Platinum Card) but make sure you read the small print and check that the policy covers everything you require it to.

Read our guide to credit card travel insurance for more information.