Don’t forget travel insurance, but beware of the small print
TRAVEL INSURANCE is a must but also a minefield to secure the right policy. Few realise that the entire cost of a holiday can be lost if key cover is missing.
Avoid signing up at travel agents when the policy cannot be compared and take care with online budget offers – including from airlines at the time of a booking – which hide away crucial aspects in the footnotes.
Do not delay taking out cover but buy protection when you book. “Losing out on a holiday is bad enough but at least by taking out comprehensive travel insurance at the time of booking a trip does not mean a financial loss, too,” says Tom Bishop, head of travel insurance at Direct Line. He reveals that that the cost of an air ambulance from California to the UK is £70,000.
Medical expenses, including the cost of repatriation, is the most expensive reason for claiming. The Association of British Insurers cites a traveller who suffered a stroke whose treatment and return cost was £768,000.
It is a fallacy to rely on the European Health Insurance Card (EHIC) which provides very limited protection in state hospitals and is currently set to remain after Brexit.
“We are still finding that people are travelling to Europe, thinking that their EHIC card is all they need, which can be a costly mistake, particularly if you fall ill somewhere like Spain where the cost of medical cover is particularly high,” says Ken McMullan, head of Saga Travel Insurance, underwritten by Collinson.
Instead look for at least £2m medical expenses in Europe and £5m worldwide which should protect not only for emergency medical treatment should you become ill or injured but, if necessary, a flight home by air ambulance.
Watch for the definition of ‘Europe’ as some budget plans exclude Cyprus, Greece, Malta and even Spain.
It is vital to declare any preexisting medical conditions. Anthony Kaye, chief executive of specialist broker Campbell Irvine, gives an example of an individual who had cancer five years ago and has now been given the all clear. The traveller may just reveal their high blood pressure but fails to disclose their past cancer condition.
If a mild stroke then occurs on holiday, it is questionable if the claim would be met as the policymaker’s medical history had not been revealed.
Consider where you stand if a family member becomes dangerously ill or even dies and their medical condition was not known at the time of booking.
How wide is the insurer’s definition of ‘family’ could be crucial in terms of cancelling a holiday after all payments have been made or flying home. Check if the policy, for instance, reimburses if an aunt or partner’s brother suffers an accident which may yet prove fatal.
AIG defines a relative as the parent, brother, sister, child, grandparent, grandchild, stepparent, step-child, step-brother or sister, or next of kin.
The largest friendly society, LV=, is more wide-ranging and includes aunt, uncle, nephew, niece, cousin and even great grandparent.
Tesco, which uses Ageas Insurance, says it may require information from a doctor to establish whether at the time of booking or insurance issued – whichever is later – the close relative was suffering from any medical condition related to the claim.
With an unstable world – both politically and in terms of natural disasters like volcanoes – cover is usually invalid if travelling to an area or country contrary to British Foreign and Commonwealth Office advice. Saga protect people who travel to 300 different countries including Botswana, Guadeloupe, Haiti and Mongolia.
Where the holiday has been booked via a tour operator, it is required to bring you home or offer an alternative destination. Insurers protect independent travellers and the costs of additional transport and accommodation as well as prebooked excursions and car hire.
It is easy to be attracted to a new sports or other activity from mountain trekking to whitewater-rafting but check the insurance position. Cluster ballooning is one of the most exciting such new activities. This is where a harness of heliumfilled rubber balloons is attached which can rise to over 5,500m. Most such sports require specialist cover.
Do not automatically renew without looking at the maximum age that can be covered. Barclays, using Aviva, will cover under 80 years. Its plan can be bought in branch, online or via a mobile.
Check that cover is adequate for belongings taken abroad, specifically cameras and jewellery. With Lloyds Bank Premium, the limit is £2,500 of which £500 may be valuables.
Dr Matthew Connell of the Chartered Insurance Institute (CII) recommends at least £1,500 cover for loss or theft of your baggage and possessions and that insurance also covers for delay.
Instead it may be better to insure such items under a home contents policy which allows a proportion to be taken outside the property.
Looking at where and how often an excess is imposed where the claimant has to fund the first part of any loss, Halifax Ultimate Reward charges up to £50 per claim but Lloyds Bank Premier £40, both provided by AXA.
Saga makes one charge of £70 but none for such areas as delayed baggage and loss of passport.
If travelling more than once a year, rather than purchase insurance each time, a multitrip annual policy is likely to be cheaper. Banks, building societies (like Nationwide) and credit card providers frequently offer some of the most comprehensive policies, often issued as a major part of a package.
Yorkshire Bank’s policies are underwritten by AIG and can be bought online or by telephoning the insurer.
A couple can include up to four dependent children who may be adopted or fostered, provided they are under 18 years when the policy is bought and are either in full-time education or living with them.
The definition of ‘money’ should not only be for cash and foreign currency but also protect for plastic cards: charge (like American Express), credit and debit.
If travel is delayed, see if there is compensation to cover expenses. The CII suggests £20 per hour for the first 12 hours to fund food and accommodation costs.
Airline failure is not covered as standard with many policies. When Monarch Airlines collapsed last year, Defaqto analysed all policies on the market and found two in five would not cover. It is offered at an extra premium in 10 per cent of annual and 11 per cent single trip policies.
The research also reveals that 125 single trip policies and 115 annual plans do not protect for cruises despite their popularity.
If confined to a cabin on doctor’s orders, excursions and other highlights of a cruise can be lost but protection is available in only 419 out of 809 single trip policies and 408 out of 849 annual ones. Daily compensation can vary from just £10 to a generous £200 with around £60 on average.