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Holidaymakers could save hundreds of pounds by cutting out travel insurance extras they don’t need.
But if you reduce your coverage too much, you risk being stuck with a bill several times larger if it turns out you’re underinsured.
How do you strike the ideal balance? Money Mail investigates.
Peace of mind: Holidaymakers could save hundreds of pounds by ditching travel insurance extras they don’t need, but cutting back too much could mean hefty bills if things go wrong
How much do prices vary?
Many “baseline” policies can cost more than double the basic coverage offered by the same company.
The insurance company InsureandGo, which we chose as an example because its cost-effective coverage is reasonably comprehensive, offers insurance for £25.12 for a two-week trip to Spain at the end of August.
Their top package costs an extra £40, or £65.25, and that doesn’t include optional extras to cover dangerous devices and activities.
This price disparity is common among insurance companies, says Rory Boland, editor of travel magazine Which?. “You don’t need to buy the most expensive cover,” he adds. “The important thing is to know what you need.”
InsureandGo has been contacted for comment.
1. £5 million of medical cover is likely to be enough
Arguably the most important aspect of travel insurance is medical expenses, along with repatriation, which can be extremely expensive, especially for travel within the US.
Holidaymakers are unlikely to want to skimp on this front, but they probably won’t need anything like the £20m offered by some policies.
According to the Association of British Insurers, the average claim for emergency medical treatment in 2022 was £1,750. Even if the worst were to happen, it is rare for claims to exceed £1 million.
However, the British Insurance Brokers Association says the largest recent claim was for more than that amount.
And consumer group Which? recommends opting for £5m of medical cover, which many basic policies do include. You’re unlikely to need more than that.
Essentials: Arguably the most important aspect of travel insurance is medical expenses, along with repatriation, which can be expensive, especially for travel within the US.
2. Cover the full cost of your vacation
Make sure the full cost of your trip is covered by your insurance in case you need to cancel.
Policies generally do not have unlimited coverage – for example, InsureandGo’s budget policy only covers up to £1000 for cancellations due to events beyond your control.
Meanwhile, its gold policy includes £7,500 for cancellation and its black policy covers up to £10,000.
For a luxury holiday or luxury cruise, you may need more cover. Alice Lawson, associate director of insurance at Holiday Extras, says the company has paid out £15,000 to a customer for a cruise cancellation.
3. You may not need baggage coverage
As long as you’re not travelling with a suitcase full of designer brands or expensive equipment, £1,000 is probably enough, especially as insurance policies often deduct wear and tear.
More expensive items, such as jewelry, phones and computers, may be covered by home insurance. Check what your policy covers to avoid paying twice.
For this reason, True Traveller does not include baggage insurance in its standard policies. “A lot of people already have home insurance covered,” explains CEO Tim Riley.
InsureandGo charges £40.05 if you take out additional device insurance in our Spain example, compared to £25.12 for a basic policy.
Don’t pay twice: More expensive items, such as jewelry, phones and computers, may already be covered by home insurance.
4. Vacation packages include additional protection
If you have purchased a package holiday (two or more items that are booked and paid for at the same time with a travel organiser, such as a travel agency), you are already covered by package travel regulations.
It is the responsibility of your holiday company to get you to your destination.
They would also normally rebook or refund your holiday if you decide to abandon your travel plans after a 24 hour delay, removing the need for trip abandonment insurance.
“If you book a package holiday, you’ll need fewer things from your travel insurance,” says Boland, adding that coverage in case your holiday provider goes bust isn’t necessary either.
Even if you don’t buy a package, if you pay with your credit card and your holiday provider goes bust, you will be covered by Section 75 of the Consumer Credit Act for items worth more than £100.
5. Don’t skimp on your personal liability coverage
You may be wondering if you really need coverage if you injure someone or their property while on vacation.
But in some cases it can prove very valuable. Both Which? and consumer specialist Money Saving Expert recommend travellers have £1m of cover, although you may want to consider increasing that amount in certain circumstances in the US.
“The biggest risk is skiing accidents. If you’re going to ski in North America, you’ll definitely want to be covered for £2 million,” says Riley.
Be prepared: Both Which? and consumer specialist Money Saving Expert recommend travellers have £1m of cover
6. Check if you are covered by your bank
Also check to see if you have travel insurance through your bank account, but be sure to read the fine print.
Some only include coverage within Europe and may not cover you if you do certain activities such as diving, horse riding or ziplining.
7. Dangerous sports may be included.
Travel insurance often includes optional add-ons for hazardous activities such as horse riding or skiing, but before paying extra, check whether your activity is already covered.
The essentials of insurance
1. Always buy before flying
Take out insurance on the same day you book your trip. Comparison website Go.Compare says that 23 percent of people take out insurance on the day of travel (which could mean cancellation insurance is not valid), while another 23 percent take it out just a week before departure.
2. Remember your European Health Insurance Card (EHIC) or European Credit Card (GHIC) in Europe
Essential: Your EHIC card is not a substitute for travel insurance
While essential, your EHIC (European Health Insurance Card) or the newer GHIC (Global Health Insurance Card) do not replace travel insurance as they only entitle you to treatment at the same price as residents of the country you are visiting.
Despite its name, the GHIC is not valid outside Europe.
3. Declare pre-existing medical conditions
If you do not declare any pre-existing medical conditions when purchasing insurance, this could void your coverage.
There are specialized companies that deal with people who have serious medical conditions, such as All Clear.
- Travelling without insurance? Email moneymail@dailymail.co.uk
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