Insider Secrets – How Good Is Your Holiday Insurance

Doctor looking at xray

Travel insurance is essential

To be honest how often do you buy travel insurance based on nothing more than price. I think most of us, me included just leave travel insurance until the last-minute. We buy travel insurance because we have too but it shouldn’t be that way. Travel insurance needs to be included as part of your overall budget and you need to consider what future trips you’ll take.

Buying the correct insurance policy for you is important and will make any emergency situation a lot less stressful. The correct annual travel insurance policy will ensure you have a worry free year. Travel insurance should therefore be looked on as part of your annual household budget and not just a one-off payment you make each trip. You can then take the annual cost and divide it by the number of trips you plan on taking. Annual insurance will always be the cheaper option rather than buying travel insurance for individual trips.

There are a lot of banks which offer free travel insurance policies as part of having an account with them. It is extremely important that you understand what you are covered for and what you are not covered for. These types of policies tend to miss out features which you would expect them to have. Ensure you read all the documentation and policy terms and conditions. There are a few free bank policies which offer no cover unless you are depositing or have a certain amount of funds in your account. There would be nothing worse than needing cover abroad after an accident to discover you bank has cancelled your policy because you didn’t meet their criteria.

Pre existing Conditions

Read this section carefully before purchasing any travel insurance because it’s not you who decides what is a pre-existing condition. Over the last 14 years that I’ve been in the travel industry, I have come across hundreds of cases where the insurance company hasn’t paid out. This has mainly been due to a pre-existing condition the traveller thought was trivial. Each insurance company has different items on their lists. It is also a good idea to speak to your doctor and get the all clear before travelling. All insurance companies will contact your doctor if there is going to be a substantial claim. Ensuring your doctor is aware of you travel plans means the insurance company will get a timely response. If you have a pre-existing condition always contact the insurance company directly to discuss adequate cover, this ensures you get the best value cover. It also means the insurance company can’t refuse a claim because everything was pre agreed.

What are the main factors to look for in a travel policy.

The top feature has to be medical cover and this will depend on where you are traveling. The USA has the most expensive medical costs in the world so £10 million worth of cover is the minimum. Asia has some of the cheapest costs but I would suggest £5 million as a minimum. Also ensure you have repatriation cover, a medevac (medical evacuation flight) costs tens of thousands of pounds.

Delays and Cancellations.

Remember the volcanic ash cloud? There are hundreds of things which cause major delays, weather, natural disasters and everything in-between. Some policies will pay out if you miss a flight due to delayed connection others won’t pay out until you prove it wasn’t your fault. You may have a situation arise before you even leave your home country. A family member falling ill could mean you have to cancel the trip before it has begun. Ensure the policy covers for these eventualities as you don’t want the stress of caring for a family member and losing your holiday.

Lost or Damaged Luggage

There’s nothing worse than that sinking feeling when you are stood at the luggage reclaim belt. You hope your bags come out first but what if they don’t come out at all or they arrive damaged. There is no doubt it’s going to have an impact on your holiday but you can lessen that impact by having the right insurance. The majority of insurance companies state that you can not make a claim within the first 12 hours. This is because most luggage turns up within that time in fact over 90% of lost luggage is returned to the owner within 24 hours. Luggage which is damaged can of course be claimed for straight away but in both cases you must get a P.I.R (property irregularity report) before you leave the luggage reclaim area. This is provided by the airlines handling agent so check when booking who that will be.

Loss of Passport

This is becoming an essential as the rules have changed regarding returning to the UK. You can no longer return using a police report, you must have a valid passport. The British Consulate can provide assistance with this and arrange for an emergency passport. However not all countries have a British Consulate and you may have to travel to the consulate to obtain a replacement passport. It can be extremely difficult to travel to a consulate without a passport. Therefore the cost to replace your passport will be substantial.

These are the essentials I ensure I have cover for all the other aspects are either nice to have or are padding to make the policy look better. You must decide what’s is the correct policy for you and your family based on the circumstances.

A good way of reducing the cost of travel insurance is to increase the amount of excess you are willing to pay. This is the amount you pay before the insurance kicks in. You will have an excess on the policy anyway which is usually the first £100 of any claim, increasing this will reduce your initial cost. There will come a point when increasing the excess doesn’t have an effect on the cost of the policy so ask the insurance company what they allow and how it affects the policy cost.

Some insurance companies now require you to have a check up from your doctor before you can get insured. It could help to reduce the cost if you offer this to companies before obtaining a quote.

I also reduce the cost further using an idea introduced by Martin Lewis and that is self insurance. Self insurance in simple terms is you pay for your treatment or replace a lost or stolen item out of your own pocket. If you have a camera worth £500 then rather than insuring the camera at a cost of £5 a month, which the insurance company keeps. You save the £5 a month in a savings account. If the camera needs replacing you use the savings to purchase a new camera, if not you have the cash available for other emergencies. You of course still need insurance cover but if you agree on an excess of £500 and need a dentist in Asia then it is cheaper to pay the dentist directly and not make a claim.

The insurance industry is big and complicated so this article is based on my own opinion and experience. It is very important that you do your own research and decide on the best policy for your given circumstances. Happy Traveling.