Travel Insurance Guide
Here’s our round up of the most common questions that people have about taking out a travel insurance policy.
What is travel insurance?
Travel insurance is a type of insurance that is designed to protect an individual or a group from unforeseen costs that might arise as a result of travelling on holiday – whether domestic or abroad.
How much does travel insurance cost?
The main factors that influence the price of your travel insurance are the number of people travelling, and the different eventualities for which cover is provided. Optional extras, such as coverage for pre-existing conditions and any-reason cancellations, will likely inflate the cost of your travel insurance.
The other significant element that could affect the cost of your travel insurance is the destination itself. This is mainly because of increased risks and the fact that the costs of medical coverage can vastly differ depending on the location you’re travelling to. Healthcare in Europe, for instance, is significantly cheaper than in America.
What types of travel insurance are there?
Due to the multitude of holiday types and destination there are different kinds of travel insurance available to cater to specific situations.
There will be a whole range of different travel insurance policies available depending on your provider that cover extra circumstances, or else combine the most desirable elements of different policies to suit your personal circumstances. But here are some of the main options and definitions you’ll come across:
- Single trip travel insurance
Single trip travel insurance policies are the most common, and are designed to cover people for the duration of a short trip away. This is the package which can be most suited to your common annual family holiday. The insurance will generally cover an agreed upon time period, usually the duration of your holiday.
There is usually a maximum length of stay included in the contract. If your holiday is likely to last more than 30 days, you may have to take out a longer-term insurance plan. If your holiday gets suddenly extended, you’re likely to have to take further coverage or risk being uninsured for the extra period of time that you’re away.
- Annual/multi-trip insurance
Annual travel insurance is designed to provide coverage for multiple trips within a year. For people who travel a lot, this can be more cost effective than taking out individual insurance packages for each destination.
Most annual or multi-trip insurance policies will require you not to stay over a certain period of time in one location, usually a maximum of 30-45 days. If you’re planning on travelling to one destination for the full 12 month period, there may be other insurance types that are more suitable.
- Long-stay insurance
Long stay insurance is designed for those trips that cannot be covered by single-trip insurance: single trips lasting more than 30 days.
- Backpacker/gap year insurance
This is similar to annual or multi-trip insurance in that it protects journeys that may last a long time and involve multiple destinations. The difference is this package is slightly more tailored towards the individual risks and requirements associated with backpacking and going on a gap year, and is slightly more flexible about the coverage you receive.
What does travel insurance cover?
Within the various travel insurance plans you might get, or combinations thereof, you’ll find that there are also varying different options for the kind of coverage that you’re entitled to. Each of these different areas will likely have their own limit. Here are a few of the most common:
Cancellation cover protects you financially against common problems that may arise as a result of your trip being cancelled. There will be a pre-agreed list of reasons of cancellation for which the insurer will pay out, as well as certain exclusions.
It is unlikely that you will be entitled to reimbursement if you decide not to travel for personal reasons.
Natural disasters which might cause your flight to be cancelled or missed, on the other hand, will likely be covered under the policy, so you could be reimbursed.
- Personal belongings
Most travel insurance plans will involve a certain amount of coverage for loss, damage or theft to personal belongings whilst you are on holiday. There will usually be individual limits for different types of items, so it’s worth checking that the coverage is enough to protect you against any reasonable damage that may be caused, or if you need to extend this coverage if you’re taking any particularly valuable items with you.
- Personal liability
This provides legal cover, capped at a pre-agreed limit, for any costs that might arise as a result of you getting into trouble with the law while travelling. If for any reason you have to pay liabilities as a result of damage to a person or property, the personal liability clause will contribute some or all of the costs depending on the situation.
- Medical coverage
This provides coverage of sudden healthcare costs, should you need it whilst you’re abroad. For most people, this should just be a standard case of getting coverage for unexpected injury or illness. If you have a pre-existing health condition, on the other hand, you may have to pay more for your health insurance in order to secure full coverage.
Accidents that arise as a result of engaging in dangerous activities may not be included in your standard travel insurance package. Horse riding, diving, sky diving, skiing and other sports are likely to require more comprehensive packages, and may apply stringent safety regulations on your activities, in order for you to be covered in the event of injury.
What does travel insurance not cover?
Because there are many different types of coverage, there are, by association, many things that might not be included in your policy. Many of these will be things that you’re unlikely to need coverage for, but depending on your personal circumstances and the details of your holiday, there may be certain types of coverage for which it is worth paying extra.
Your travel insurance contract will likely include a pre-disclosed list of exclusions. You can usually purchase ‘cancel for any reason’ coverage on top of your standard agreement to include any exemptions relating to sudden cancellations. Otherwise, cancellations because of bad weather, changing your mind, or the transport company ceasing operation are usually exempt from any liability.
Any medical costs that could arise due to insobriety, intentional harm to yourself or others, mental or psychological disorders or venereal diseases tend not to be insured. Any losses that could be incurred because you’re participating in an illegal act are also rarely covered. You might also want to check if any destinations are excluded from cover.
What are the differences between individual and group travel insurance?
Most travel insurance providers will allow you to cater your policy to the number of people travelling. It’s usually more financially viable to get group coverage, such as a family coverage plan, rather than insuring each individual member of your traveling group separately. Family coverage usually remains at a fixed price regardless of the number of people travelling, so there is potential to make significant savings here.