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what is travel insurance

What is travel insurance?

Travel insurance is a specialist insurance meant to cover you for medical expenses and losses that might occur while you are on holiday or travelling.Travel insurance can usually be arranged when booking a trip or later independently. In this guide we’ll give you the lowdown on everything about travel insurance, from buying your cover to making a claim and everything in between.

Why should you buy travel Insurance?

Often travel insurance is the last thing on our minds when we book a holiday. However, travelling without travel insurance can prove to be a very costly mistake.

The main reason people do buy travel insurance is in case they suffer from an illness or accident abroad. However, there are many other reasons to spend a couple of pounds to make sure you are protected.

  1. You need to cancel your trip
  2. Sometimes the unthinkable happens. What happens if someone gets sick and can’t travel, a parent dies, or your house floods just before you leave? With travel insurance which has cancellation coverage, you’ll be able to recuperate the costs of your pre-planned holiday.

  3. You miss your connecting flights
  4. You’ve planned a Scandinavian viking cruise but you discover the connecting flight to get to the ship is delayed. With the missed connection it looks like you won’t make it to the ship on time. Does it mean that your holiday is over? With missed travel delay coverage, you can take another flight to catch the ship at its next destination. You’ll also have help to arrange and pay for those travel changes.

  5. Your flight is cancelled
  6. There is an unexpected volcanic ash cloud and your flights are cancelled. With trip interruption coverage, you’ll have the money to refund the expenses of a new return ticket or to stay in a comfortable hotel.

  7. There’s a natural disaster in the country you’re planning to visit
  8. You’re about to go on the trip of a lifetime to Japan and have been saving for years to get enough money to go but an unexpected earthquake means that your holiday accommodation has been destroyed. With travel insurance protection for natural disasters, you’ll be able to recover your prepaid hotel expenses.

  9. Your baggage is delayed or lost
  10. You’re on the way to a two week holiday in Singapore. You’ve arrived at the airport but your bags haven’t. You’re in Singapore with only the clothes you have on your back. Does it have to spoil your holiday? With coverage for delayed or lost bags, you don’t have to worry. You can go out and buy some new clothes and toiletries and you can claim back the money. Read more

  11. Your passport is stolen
  12. You are backpacking in Columbia and your passport has gone missing. It’s every travellers worst nightmare. With coverage for lost passports and travel documents, you’ll have help with the process of getting emergency travel documents from the embassy and you won’t have to pay the price of a new passport.

  13. You need an emergency medical evacuation
  14. You are in the Caribbean for your golden anniversary and your husband suffers a minor heart attack. There is no treatment available on the islands and you will need to be evacuated to Florida for emergency medical treatment. With medical evacuation coverage, you can arrange rescue and safe transportation to a medical facility. Medical evacuations typically cost tens of thousands of pounds.

  15. Financial Failure of your travel company
  16. You’ve been looking forward to your holiday in Spain for months but just before your trip you get the news that your travel agency has gone bust. How will you recover your money? With travel insurance that covers financial default, you’ll be able to claim for the cost of your holiday meaning that you can book another one and you don’t have to miss out.

  17. You need emergency assistance services
  18. You’re in Thailand on your gap year. You planned to go and visit the Islands for some sunbathing and partying but the ferry has broken down and you don’t speak the language. Who can help you locate alternative transportation? Most travel insurance policies have emergency assistance services. The service agents will help you claim back the money for your original transport and arrange further travel.

What types of travel insurance are there?

There are two main types of travel insurance: annual or multi trip policies or single trip policies. Which type you buy will depend on a number of factors including how often you plan to travel , the lengths of your trips and where you plan to go.

In addition to standard travel insurance policies there are a number of specialist add-ons or bolt-ons which you can add to standard policies. There are also often specialist insurers who deal with particular kinds of holidays.

How much does travel insurance cost?

How long is a piece of string? Travel insurance isn’t one sizefits all so unfortunately there is no ‘standard’ cost of a travel insurance policy. However, knowing general guidelines about how much travel insurance costs will help you make a more informed decision when you come to buy your insurance.

We would expect that the typical travel insurance plan will cost anywhere between 3-8% of the total cost of your trip.

What affects the price of travel insurance?

There are four important factors when considering the price of travel insurance. These are:

  • The age of the traveler
  • Destination
  • Length of trip
  • Type of coverage

The age of the travellers and their current state of health is one of the most important factors when considering the price of travel insurance. Travellers over 65 or people with pre-existing medical conditions may find it more difficult to find cover and will find that they will pay a premium for insurance. There are some travel insurance providers such as Saga travel insurance, who specialise in insuring the over 60s, and Boots Travel insurance, who specialise in pre-existing medical conditions, which may be cheaper options under these types of circumstances.

Of course the length and destination of your trip will also have a big impact on the price of your travel insurance. Some destinations such as the U.S.A or Canada are more expensive while European travel for Brits will work out much cheaper thanks to our EHIC card and reciprocal healthcare agreements, at least until Brexit kicks in.

As mentioned above, there is also specialist travel insurance for things such as winter sports or cruises. These also obviously raise the price of your cover considerably.

When should I buy travel Insurance?

This is a no-brainer. Many people wait until the last minute to book their travel insurance but this means that you are missing out on half of the benefits of your travel insurance. You should get your travel insurance at the same time as you book your trip - without exception!

Remember you should buy your travel insurance on the same day that you book your trip!

Remember that one of the reasons that you buy travel insurance is to protect your travel plans pre-trip. If you need to cancel your trip, there is a natural disaster, or your travel company goes bust, you won’t be covered unless you have travel insurance.

Booking insurance at the last minute before your holiday might feel a bit like closing the barn door after the horse has escaped if something goes wrong - so make sure you get yours booked today!

Who and what are you insuring?

Man with broken arm

Travel insurance is an incredibly complex matter. In fact, you might not know it, but travel insurance is one of the most complex financial products you can buy! And yet, most of us give our travel insurance less thought than which ice cream we are going to buy in the gelateria when we arrive in Italy. This is one of the biggest mistakes that consumers make!

But who can blame them? Reading though travel insurance policy documents can often seem like reading in another language - something we like to call “legalese.” In fact, many of the common reasons travel insurance companies don’t pay claims are due to travellers not having properly understood all the terms and conditions of their policy. However, not to fear, Selectra is here to explain some of the most common terms you will find lurking in your travel insurance documents to help you make sure you have the right level of travel insurance cover.

Emergency medical/repatriation

Medical cover is maybe the most important thing to consider when buying travel insurance.

Being ill abroad is not only costly, it can be a really scary situation and having the right insurance can really help you turn a nightmare into a manageable problem. The amount you need may sound too high but the cost of hospital treatment abroad could be many hundreds of thousands of pounds.

Some insurers also offer extra cover for things like hospital benefit and replacement of prescription medicines and glasses so it’s worth being aware of exactly what your policy covers.

Cancellation and Curtailment

Travel insurance will usually pay you compensation if you have to cancel or cut short (curtail) your trip for reasons such as illness or bereavement.

However, this is one of the most tricky aspects of travel insurance policies and there are often many hidden exclusions that you need to look out for. It's always important to understand the terms and conditions to know exactly what is included and what is not.

Travel delay and abandonment

Many customers believe that if their trip is delayed or if they have to abandon their trip then they will be covered in any circumstances. However, this is another one of those situations where those pesky insurers have tricks to weasel out of certain common situations.

Missed Departure

Missed departure cover will protect you in the event you miss the departure of your international flight, ferry, cruise ship or train because of a strike, or other disruption of public transport, an accident involving the vehicle you are travelling in, or the mechanical breakdown of that vehicle. However, it won’t cover you if you slept through your alarm clock and missed your flight.

Personal possessions and baggage

Travel insurance normally covers you up to a certain amount for lost or stolen baggage and belongings. This amount varies widely from insurer to insurer so it’s really worth doing your homework to find out which policy has the highest limits.

As well as an overall limit for lost and stolen belongings, most travel insurance policies will limit what you can claim for single items and all valuable items. The maximum is usually somewhere between £150 and £350 per item, so be sure to bear this in mind when packing for your holiday - maybe it’s best to leave that expensive laptop at home!

Some travel insurance policies do have special gadget coverage so shopping around is definitely worth it. Although you will have to pay a bit more you can rest at ease knowing that your tablet or phone are protected.

Personal Money

Travel insurance policies also tend to limit the amount you can claim for lost and stolen cash, and travellers cheques. Often the maximum is between £200 and £500 and the amount will vary depending on the age of the person in possession of the money.

Passport and Travel Documents

Losing your passport abroad may not be as uncommon as you think. Last year 20,663 British passports were lost or stolen abroad.

Luckily, the majority of travel insurance policies cover the cost of emergency travel documents and getting a new passport but the whole situation can be complex and stress-inducing.

Personal accident cover

Last year 470,000 British people ended up in trouble abroad - not to mention the recent spate of deaths due to the Balconing trend in Spain. There are thousands of cases of accidents abroad especially in countries where British people tend to go on holiday such as Spain and the U.S.A and numbers in countries such as Thailand and the Philippines are increasing year on year.

Personal liability and legal expenses

Personal liability is an important, if rarely used, feature of travel insurance. It covers you in case you face legal bills if you accidentally injure someone else or damage their property while you’re abroad.

Catastrophe Cover or replacement accommodation

Catastrophe cover, sometimes known as natural disaster cover, is designed to help you if you are forced to move from your pre-booked accommodation as a result of an unexpected natural disaster such as a hurricane, flood, fire or earthquake. It will also cover any pre-booked accommodation, flights and excursions should there be a natural disaster before you leave, forcing you to cancel your trip.

Hijacking and terrorism

Recent terrorist attacks in Turkey and the U.S.A have brought this theme to the forefront of travellers minds. What exactly would happen if there were a terrorist attack in a country you were visiting or planning to visit?

With travel insurance there is no clear cut answer as there is a huge variety of differences between policies when it comes to cover for terrorist acts. Some include it, some don’t and some you have to buy as an extra add-on.

What is clear is that you will only be covered if it is deemed that you cannot travel to the region for safety reasons. You won’t be covered just because you are worried something might happen.

Main exclusions for travel insurance

Travel insurance providers, and insurers in general, are infamous for trying to dodge paying out whenever they can. They often use the excuse that whatever you are trying to claim for was excluded from the policy, and direct you to re-read your policy documents.

Sadly, it’s true - most of the main exclusions to policies are clearly stated in your policy documents - IF you know where to look and exactly what you’re looking for.

Travel Insurance by destination

The cost of your travel insurance will vary depending on where you plan to travel. Each country has different medical systems, levels of care and most importantly - costs. Our guides to travel insurance destinations will get you up to speed no matter where you are planning a trip to.

Compare travel insurance providers

Not all insurance providers are made equal and it can be really difficult to know that you are getting the best deal when you compare travel insurance.

Is their website easy to use? How much cover are you really getting? Do they pay out easily for claims?

Fret no more as we’ve done all the hard work for you by looking at all of the big name travel insurers on the market at the moment and giving them an independent unbiased review so you know exactly what you’re getting when you book your travel insurance with one of these travel industry giants.


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Common Travel Insurance questions answered

How can I get long trip travel insurance?
Are there different ways of claiming for my travel insurance?
Do I need specialist cover for my holiday?
Do you need travel insurance or can you use your EHIC (E111)?