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Travel Insurance Explained

Travel insurance covers the millions of people who go overseas each year to enjoy a break but end up stranded in an airport lounge due to a cancelled flight or in the hospital after falling ill or suffering an injury.

For UK holidaymakers, the average cost of a travel insurance claim is £371. The most common reasons for claiming are trip cancellation or a medical emergency, according to a travel insurance report which analysed 25,000 claims in 2021.

Travel to the USA and Spain generated the most claims, with both countries taking first or second place for lost baggage, trip cancellations, medical emergencies and travel delays.

Britain came third for cancellations and delays, while Thailand took third place for baggage and medical claims.

Travel Insurance Tips

The researchers also suggest some top travel tips for making a holiday insurance claim:

  • Ensure the level of cover you buy meets your needs and that any special requirements are included in the policy
  • Travel insurance is not private medical cover and won’t pay medical expenses in Europe or elsewhere that are covered by a GHIC (General Health Insurance Card) or EHIC (European Health Insurance Card)
  • Always declare your pre-existing medical data – the insurer will check your GP’s file, and if they find you have missed some vital details, the policy will be void, and any claim dropped.
  • An exclusion on most policies will not cover an incident or treatment that involves having drunk too much alcohol.

Shocking Number Travel Without Insurance

The latest data from travel agent trade body ABTA reveals that one in five holidaymakers travelled without cover in 2019 – up to 8g.6 million travellers. Three million said they didn’t need cover, and more than two million explained they were ready to take the risk.

In one case, insurer trade body the ABI said that a GHIC only passed 80 per cent of a tourist’s medical bills after a fall in France. The remaining £16,000 was covered by insurance and included bringing the patient home on a stretcher.

In another case, a patient with a lung condition was returned home from the Canary Islands by air ambulance. After receiving initial treatment under a GHIC, the insurers picked up the rest of the £67,000 bill.

Before Buying Travel Insurance

Before buying travel cover, you need to work out how much you need – cover comes at different levels and at other times.

Single-trip cover is for one visit overseas in a year, while multi-trip cover generally lasts for 12 months and covers several trips.

List the countries you visit, even if you are only passing through, for instance, a road trip to Italy will take you through France, Switzerland and sometimes Germany. Depending on where you stay, you might go on a day trip to Slovenia.

Think about what you will do on holiday – some sports and other activities are excluded, so if you want bungee jumping, diving or skiing you may need extra cover.

How Travel Insurance Works

Although travel insurance comes with bells and whistles to cover lost baggage, cancellation and other disruptions, the prime purpose is to pay emergency medical cover and repatriation bills.

This is why insurers screen your medical history with so many questions before pricing and issuing the policy.

Unfortunately, older travellers are more likely to have health issues and travel to places where the cost of care and returning a patient home are more expensive.

It’s also the main reason why older travellers must pay higher insurance premiums because the risk of them having a medical emergency is higher than for the average 30 or 35-year-old. The ABI agrees the cost of premiums rises for older travellers but also points out that so do the cost of claims.

Don’t forget to contact your insurer as soon as a medical emergency arises. You can save their number on your mobile phone to ensure you always have it handy.

What Travel Insurance Covers

Overseas medical cover is one of the most essential parts of travel insurance due to the high cost of medical treatment and transfers home.

Check your policy has this basic cover before buying:

  • Emergency medical treatment costs, including hospital charges and ambulance fees
  • Returning you home following medical treatment abroad if you cannot use your original ticket
  • Reasonable additional transport and/or accommodation expenses for a close relative or friend to stay with you or the cost of their travel from the UK to escort you if required
  • 24 hour helplines offering support and advice about your treatment.

Travel Insurance FAQ

What are GHIC and EHIC cards?

A GHIC – Global Health Insurance Card – is the post-Brexit card that allows British travellers to access emergency health services abroad, but mainly in Europe.

An EHIC – European Health Insurance Card – is the pre-Brexit version.

Both cards allow British travellers the same access rights to health services at the same cost as someone living in the country.

Watch out for the GHIC\EHIC insurance trap

GHIC\EHICs are not the same as health insurance and only allow medical treatment to stabilise a condition. They will not cover the cost of repatriation, for example.

Travel insurers are unlikely to accept claims to reimburse GHIC\EHIC medical costs which are paid by the National Health Service in the UK.

When should I take out travel insurance?

Research shows two out of three travellers book their insurance within 48 hours of the start of their trip, which means they have no cancellation cover even though this is the top reason for claiming in the UK.

Who pays for a cancelled or delayed flight?

Flight delays and cancellations are a nightmare for travellers because working out who pays is sometimes a lottery.

Firstly, most policies have a set time for a delay before they accept a claim.

Second, few will cover for lateness beyond your control that causes you to miss a flight or ship.

Thirdly, in Europe, airlines have an obligation to pay compensation based on the length of delay and distance you are flying.

Best advice is keep a log of any compensation offered – and that’s hotel rooms and food as well as money.

Claiming for lost gadgets or baggage

Photograph your gadgets and baggage before travelling so you have proof of exactly what you have with you in case your belongings are lost. Most policies have a limit on claims for technology and baggage, so check the limits and make sure you do not exceed them.

Below is a list of related articles you may find of interest.

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