What Types of Travel Insurance Are There and How to Choose?
Record numbers of people are heading overseas on holiday but nearly as many as two in five people (38%) who travelled abroad in the past 12 months have holidayed without the right travel insurance, took part in activities which may not have been covered, or didn't have any insurance at all, according to ABTA.
Travel insurance can cost less than a couple of drinks in the airport bar. However, how can you ensure that you are buying the right insurance policy and what do you have to take into consideration when comparing travel insurance policies?
What things should you take into consideration when you buy a travel insurance policy?
Travel Insurance can seem really complicated for the uninitiated. However, by following a few simple steps it’s easy to choose the right policy for you needs. You just need to take these five questions into account before you start looking for cover.
1) How often will you be travelling?
One of the first things you have to think about when you buy insurance is whether you want a policy which covers just one trip or whether you would prefer an annual policy which covers you for a whole year. There are various restrictions to both types of policy.
2) Who will you be travelling with?
There are various types of policies for either single travellers or groups. If you are travelling as a group it may be more convenient for you to take out either a family or group insurance policy.
3) Where will you be travelling to?
Insurance for travelling only within Europe will be much cheaper than a policy which is worldwide or which covers especially expensive destinations such as The United States, Canada or Japan. There are also some Commonwealth countries such as Australia which have special health agreements with the UK. Make sure you know about them before you travel.
4) What will you be doing on your trip?
Adventurous and long term travellers beware! Only some activities are included in your basic policies and these activities differ from policy to policy. Make sure you find out if you need to take out a special policy or if you can add adventure sports for example.
5) Which pre-existing medical conditions do you have?
Some insurers won’t cover you if you are over a certain age or have pre-existing medical conditions. It’s really important that you make sure you will be covered as not declaring medical conditions can invalidate your policy.
How much travel insurance cover do you need?
The range of policies and the amounts that they cover can vary widely and it can leave you wondering...do I really need £10 million worth of medical cover? Knowing the facts can give you at least some idea of what you might expect to pay if something unexpected happens to you abroad.
53% of travel insurance claims last year were for medical treatment abroad and the average cost of these claims was £2,268. 23% of these medical claims were over £1000. Many people feel like they won’t get sick on their holidays or that, if they do, it won’t cost all that much. However, the bills can quickly mount up and you’ll soon be regretting not spending that tiny bit more to protect yourself.
In some countries you will pay much more for medical treatment so it is essential that you get the right cover for your destination. For example:
Average cost of medical claim in USA: £7,594
Average cost of medical claim in Spain: £1,721
Average cost of medical claim in Australia: £818
Cancellation or curtailment of your trip due to circumstances you can’t control can also cost a considerable amount. Think about how much you have spent on your holiday - without insurance you could lose it all. The average claim is £1019 but could run much higher depending on the type of holiday you have bought.
Types of travel insurance policy
There is no one size fits all when it comes to travel insurance policies. You must make sure that you read the terms and conditions carefully and consider the five key questions when choosing your policy.
Single Trip Travel Insurance
Single trip travel insurance is best for those who aren’t big travellers and who are most likely to go away once or twice a year at most. It can be quite economical and usually you can stay protected between 30 and 40 days at most - the perfect solution for those two week breaks away in the sun!
Annual or Multi-trip travel Insurance
For those who travel more often, an annual or multi-trip travel insurance policy can be more economical at the end of the day.
This will cover you for all the trips that you take during the year. With these policies you have to be careful to make sure that you remember which things you are covered for and which you are not - it’s sometimes easy to forget that you aren’t covered for camel riding and then book a desert trip. This can be a costly mistake! Annual trip policies also often have a lower limit to the amount of days you can take on each trip.
Winter Sports of Extreme Sports Policies
For the more adventurous among us you have to remember that winter sports and generally any other extreme sports are not normally covered as standard. Often golf and any other sports that require a lot of equipment can also be excluded.
You can either choose to go with a company who specialises in travel adventure holidays such as SportsCover, DogTag or Snowcard. Otherwise, nowadays most insurers offer sports cover as an additional add-on or bolt-on, although the level of cover differs from supplier to supplier.
Generally, in the policy documents you will find a list of sports that are included and excluded from your policy. Make sure you check it carefully as many sports which we would consider normal such as trekking are often considered high risk activities by insurers.
Don’t want to get caught out on the slopes? Check out our guide to buying the best sports cover.
Backpackers or Long Term Travel Insurance
Insurance has traditionally been aimed towards those who are going on a package holiday. However, in recent years, in no small part thanks to companies such as Expedia, Glamping Hub and Airbnb, the DIY holiday has been booming. More and more people are choosing to travel longer term and plan and book their own trips without the help of travel agencies.
Backpackers or long term travellers usually need to buy a different kind of policy called a long term policy. These usually cover several different destinations and can be used for trips of up to 24 months.
There are also specific insurance companies for long term travel such as World Nomads, First Allied and World First. Many high street travel agents, such as STA Travel, specialising in round the world trips also offer this kind of insurance.
It’s especially important that backpackers, who normally don’t have concrete plans check specific parts of their policies. Specifically, the ability to add activity packs and extend their cover while they are away. This will provide the flexibility should they suddenly decide to do a bungee jump, go scuba diving or decide that they won’t be home coming home for another 8 months.
It’s also useful for backpackers to have cover for missed connections if they don’t buy their flights, hotel and transport as a package. This doesn’t normally come as standard with most policies.
Find out more about the best travel insurance for backpackers in our no nonsense guide to backpacker's insurance.
Family Policies and Group Policies
If you are travelling as a group or as a family it may be more economical to buy a group policy with everyone noted on the same policy. It makes common sense. If someone in the group has to claim then everyone is included in the claim. However, do be aware that these types of policy can be more expensive.
If a family takes out annual cover, this also covers each individual should they travel alone during the duration of the policy. It also includes any children who are on the policy. They don’t need to travel with an adult who is on the policy as long as they are with someone who is over the age of 18.
Over 65 Policies
As we get older travel insurance becomes a little bit more complicated. Older travellers are often seen as a bigger risk and consequently many providers refuse to provide cover, or provide cover but at an increased cost.
It’s not just the over 65s that face this kind of discrimination either. Over the age of 40 there’s a steep rise and from then on premiums can go up every 10, or even five years. Once you pass 65, many insurers won’t insure you at all.
However, there are several companies who offer travel insurance well into our twilight years. <>Age Co Travel Insurance, >Saga and >JD Travel Insurance all offer policies without an upper age limit.
Read more about how to get the best deal on your travel insurance in our guide to the best policies for the over 65s.
All material on this page and the selectra.co.uk website is for information purposes only and does not constitute any form of financial advice. Selectra.co.uk is not responsible for any consequences that might arise from your use of the information provided.