Avoid These Travel Insurance Hazards

According to a major survey undertaken by eSure last year, one in every seven Brits traveling abroad will make a medical claim on their travel insurance. That’s a scary statistic, but an even more frightening one is that a full 25% of us jet-off around the world with no holiday insurance at all.

With travel insurance cheaper than it has ever been, it’s foolhardy to go off on holiday without protecting yourself against the expense of lost luggage, theft, medical mishaps and cancellation. In many cases, if you shop around for the best deal, you can find standard single trip cover for as little as a tenner. It does require some shopping around though, together with an understanding of the most common hazards that could result in you paying far more than you need to.

Hazard #1 – Over 65 Travel Cover at Triple the Cost

The Association of British Insurers claims that people over 65 are three times as likely to make a claim on their insurance. When they do, the claim will be three times the size of claims made by younger policyholders. That’s the justification for charging double, and sometimes triple the premium for travel cover over what they charge to insure those under 65. Many insurers won’t even issue a policy for someone who is over 65 – and even more refuse to cover those over 70. By the time you reach 80, your choices for travel insurance are limited to just a few specialist insurers who charge whatever the market will bear.

While you won’t find any insurers who don’t charge more for over 65 travel insurance, shopping around WILL find you better deals. Look beyond the usual choices to find the cheapest cover that offers you just the benefits that you need. As a general rule, you’ll get a better premium from standalone insurance offered by traditional or specialist insurers than you will from most of the providers who act as intermediaries or agents for the insurance companies. One provider that often tops price comparison tables of the cheapest cover for over 65's is Insure and Go, who charge about 25% extra for over 65 travellers rather than the 100% or more that you’ll find from some providers. Again, confirm this for yourself by comparing the market and checking the small print.

Hazard #2 – Insurance from Non-Insurers

Where you buy your travel insurance and who sells it to you can also play a major role in how much you pay for a policy. These days it seems like everyone is offering to sell you insurance – your bank, your credit card company, even the local supermarket. In many cases, these glorified insurance agents are not in the business of selling insurance – they’re in the business of re-selling insurance. You’ll often pay far more for your travel cover through a non-specialist insurer than you would if you go straight to the source.

As a general rule of thumb, you’re likely to save money by buying from a traditional or specialist travel insurer, but this can only be confirmed by shopping around. Perhaps as important, a traditional insurer can offer you advice on cover that you’ll need and help tailor a policy to suit your particular circumstances. Most of the high street retailers only offer one-size-never-fits-quite-right policies.

You may get an even better deal if you check with an insurer with whom you already have a policy. For example, you may already be covered through your home contents or health insurance policies for some items and claim events, possibly requiring only a basic, top-up policy for anything not covered.

Hazard #3 - Travel Agent Prices

Your travel agent should know travel insurance and be able to offer you a great deal, right? Wrong. According to the Treasury Select Committee, policies bundled with your holiday package can cost you over 91% more than the cheapest provider. That’s nearly double what you’d pay by shopping around for the most competitive rates.

Currently, travel policies packaged with other products and sold through an intermediary (i.e. your travel agent who doesn’t insure you, he merely sells you cover provided by another insurer) are not subject to FSA regulation as are standalone insurers.

While MPs are calling for tougher rules to cover travel agency insurance policies, until those rules are in place, you can get caught out paying almost double for your holiday cover.

Hazard #4 – Multiple Policy Excesses

All policies contain a standard excess which requires you to contribute an amount towards the cost of a claim. However, some policies will charge you multiple excesses for the same claim event. For example, if you were to fall down some stairs, break your leg and smash the camera hanging around your neck, you could have to pay one excess for the medical claim and another for the broken camera. The best way to be sure is to read the small print or confirm the terms of the policy excess with the insurer before buying.

A Final Caution

The best way to ensure you get the right cover for your holiday at the right price is to know what cover you need, compare as much of the market as possible for the best prices and ensure your policy offers appropriate protection for your trip. If you’ll be participating in winter sports, diving or extreme sports, for instance, you may need separate cover. Better to pay for it than to be uninsured if things should go wrong.

Above all, know what you need and know what you are buying by reading the small print before you part with your money.