Travel insurance bill leaps to £385m

Payouts on travel insurance policies have reached a seven-year high.

The number of claims made last year jumped by 30,000 to 510,000, costing insurers £385million.

The increase was mainly driven by people getting money back for cancelled trips, said the Association of British Insurers.

It is believed the collapse of airline Monarch and air traffic control strikes were among the reasons for an 11% spike in cancellation claims, worth £145m. However, the biggest cost to travel insurers is for medical issues.

There were 159,000 medical claims last year, worth an average of £1,300 each and costing the industry £201m.

Charlie Campbell, the ABI’s Policy Adviser for Travel, said: “Insurers are paying out £1m every day to cover the unexpected costs of illness, injury or cancellation.”