Many people consider travel insurance a luxury good and don’t take out a policy when vacationing. However, if disaster strikes and you don’t have the proper coverage, you may be liable for damages you cannot afford.
Travel insurance elements of coverage
While it is important to find a policy with cheap premiums, it is equally important that you choose a policy with adequate coverage.
There are countless add-ons available for travel insurance policies that may be worthy of consideration, but every basic policy should include the following elements of coverage:
Cancellation and Curtailment
If you have to cancel your trip or cut it short, travel insurance will provide a certain amount of reimbursement to cover the cost of your cancelled or truncated vacation. The coverage amount varies, but it is generally recommended to have at least £3,000 of coverage. Depending on the fine print of your policy, you should be covered if you are forced to cut short your trip or cancel it due to:
- Certain illnesses and injuries.
- Certain accidents.
- Family emergencies.
- Changes in weather preventing flight.
- Jury duty.
A travel insurance policy generally provides a certain amount of coverage for lost or stolen baggage, and personal belongings whilst travelling. You should make sure that your policy provides coverage of at least £1,500. You should also make sure that your insurer provides the largest amount of single item coverage possible – most providers limit this to up to £500.
This element of coverage reimburses a portion of the legal costs in the event that you injure somebody or something on vacation. Despite the fact that it is rarely utilised, personal liability coverage can save you from going insolvent if an accident does occur. It is advisable to make sure that your policy covers up to £1m, as legal costs can quickly mount up.
Similarly to personal liability coverage, medical cover is an important feature of every travel insurance policy. Depending on your travel tendencies, you may opt for European or worldwide coverage. For European travel insurance policies, we recommend up to £2m in coverage. However, for worldwide plans, you should look for at least £5m in coverage.
While this may seem extraordinarily high, medical expenses for serious illnesses and accidents can be astronomical, especially if you are abroad. You must also make sure that your worldwide plan provides coverage for repatriation in case you require an air evacuation to the UK, which can be very costly.
If you have a pre-existing medical condition, most standard policies are unlikely to cover any illnesses that arise from your pre-existing conditions. Nevertheless, it is important that you declare any health issues when you apply for travel insurance, as failure to disclose this could invalidate your policy.
While you are on vacation, disaster can strike at the most inopportune times. Having comprehensive 24-hour emergency assistance while you are abroad can mean the difference between a minor inconvenience and your vacation being ruined.
Most policies provide compensation if your flight is delayed for longer than 12 hours. To ensure that you do not run into any issues with your insurance provider, you should ask the airline to provide you with a confirmation of the delay so that you can use this as proof in case your provider gives you a hard time.
Even if you consider your travel insurance policy flexible, there are certain behaviours, no matter how lenient your insurer is, that will invalidate your policy. While life is certainly unpredictable, and sometimes the outcome of events are out of your control, there are certain precautions you can take to reduce the risk of your policy being invalidated:
- Any incident that occurs while you are under the influence of alcohol and drugs may be subject to exclusion.
- Any incident that is directly attributable to your negligence or recklessness can invalidate coverage.
- Purposefully withholding a pre-existing medical condition may be grounds for exclusion.
- If you are going on a cruise, you should check with your insurer, as they are not ordinarily covered under basic policies.
- Your insurer is unlikely to cover you if you travel to any area that your government has issued a travel warning for. When in doubt, you should check with your policy provider.
- Some policies contain, ‘act of god’ clauses, which contain coverage exclusions for certain natural phenomena such as earthquakes, tornadoes, etc.
If there is any doubt, you should always err on the side of caution and inquire with your provider about anything you think may be excluded from your policy’s coverage. You do not want to find out the hard way when you submit a claim and have it rejected.
Travel insurance policy considerations
Understanding the basic elements of a travel insurance policy is only half the battle. There are still many other factors that can determine the quality and scope of your policy’s coverage. The following considerations should also be taken into account:
- Look for insurers that have an Air Travel Organisation (ATOL) licence.
- Look for insurers which are members of organisations that provide consumer protection schemes, such as ABTA (Association of British Travel Agents).
- Be aware of policy overlap. For example, some elements of contents insurance may provide coverage for your personal belongings, which may make baggage cover in your policy superfluous.
- If you are travelling within Europe, you can apply for a European Health Insurance Card (EHIC). This card will allow you to receive certain medical treatments in state-run hospitals in the EU.
- Under some policies you may be required to purchase new-for-old cover if you want your lost or stolen personal belongings to be replaced with brand new ones.
- Some policies will provide scheduled airline failure insurance, which will protect you in the event of your airline going insolvent.
Making a claim
Even though thousands of vacationers travel without incident, that does not mean that you will never encounter any problems. Unfortunately, if you travel enough, it is likely that you will eventually have to make a claim on your travel insurance policy. While you may have heard horror stories about people unsuccessfully making claims, this is usually the exception, rather than the rule.
To improve the chances of your claim being successful, you may want to consider the following tips:
- Always bring along your policy details when you travel. Some insurers will require you to alert them to any situation in which you might make a future claim.
- Always keep any receipts you receive while travelling. Your insurer may require you to provide proof of your purchases to reimburse you for a claim.
- When in doubt, always keep meticulous records of any issues that arise on your vacation. For example, police reports and doctor records may be required for reimbursement.
How do I make a Claim?
If you encounter a situation in which your travel insurance may provide coverage, you should contact your insurer as soon as possible to lodge the claim. Many insurers have a deadline of 31 days, so it is important that you act swiftly. You should be able to locate your insurer’s claim hotline in your policy’s documentation packet.
When you call the hotline, you should have all your documentation handy, as they are likely to ask you specifics about the claim. They will then ask you to fill out the claim form, which can be downloaded from your insurer’s website, or sent to you by mail.
Assuming you filled out the form accurately, your insurer should grant your claim within a couple of weeks. Make sure to be patient, insurers receive thousands of claims weekly, so don’t expect yours to be dealt with in a matter of a day or two.
If you believe your insurer unreasonably declined your claim, you should follow up with a letter that explains your case. If they decline your request, you may have recourse through the Financial Ombudsmen Service, which has the legal power to force your insurance company to honour your claim.