Holiday insurance can give you peace of mind

• What you need to know about travel insurance
• Find out what your policy should cover
• Get the best deal

If you go on holiday at least once a year it’s a good idea to have some sort of travel insurance. Travel companies make a lot of money selling individual insurance policies when you make your booking. This may seem like an easier option but you are likely to end up spending much more than you need to. As with most types of insurance, there’s a lot of competition in the market and there are loads of policies that are much cheaper and better value if you just take a few minutes to look around.

What you need to know

There are two basic types of travel insurance:

• Single trip travel insurance
• Multi trip, annual travel insurance

If you travel twice or more per year you should opt for a low-cost annual multi trip policy. If you're a frequent traveller you'll be saving lots of money and time with an annual multi trip policy rather than taking out single trip policies each and every time you travel. Another benefit to annual cover is that you can be spontaneous and take advantage of any last minute deals without worrying about buying insurance.

If you don't travel often a single-trip policy may be better. There isn't much point paying for cover throughout the year if you only go away once. Another bonus is that you can tailor a single policy to match the type of holiday you take. So, for example, if you want to take one specialist holiday e.g. one that includes winter sports, you can pay the add-on for that single trip and change it again for your next trip.

Of course, with both single and multi-trip policies, the amount you pay will also depend on what you want to do on holiday and where you want to go. If you plan on travelling to an unstable region of the world i.e. Middle East, sub-Saharan Africa and some parts of South America, the premiums will be a lot higher than if you decided to travel to Whitby for the week. A holiday picking mushrooms at a remote village in Yorkshire will be cheaper to insure than a trip to the Amazon jungle bungee jumping.

Most insurers will expect you to pay an excess - a set amount of money towards particular claims - which you should make sure you are aware of when you take out the policy. Some insurers may offer you the chance to pay a higher excess for lower premiums.

Family travel insurance

A family policy allows you to save money by covering yourself, your partner and your children rather than take out policies for each individual member of the family. Again you can either cover the family for a single trip or for several trips within a year. Some insurers will set their premiums according to the number of children you have, and others will have a flat rate for any number of children so if you have a large family go for the latter option.

The European Health Insurance Card (EHIC)

Formerly known as the E111 form, the EHIC covers any medical treatment that becomes necessary during your trip, because of either illness or an accident. It also covers any treatment you need for a chronic disease or pre-existing illness. Note that it only entitles you to state-provided healthcare and you may have to make a contribution to the cost of your care e.g. for medicine and the bed.

The EHIC is NOT a substitute for travel insurance. You will still need private travel insurance to cover any contribution which cannot be reimbursed and other eventualities not covered by the EHIC.

What should be covered

The following are the basic costs a travel insurance policy should cover:

• Medical expenses: This is probably the main reason for taking out travel insurance as it covers you in the event of an medical emergency or accident whilst on holiday, but they won't pay out for an accident or injury if you were drunk or on drugs so think twice before that second jug of sangria!
• Personal belongings: To cover you for the loss or damage of your belongings. Remember there is likely to be a limit on claims and certain rules that your insurers will have for storing valuable items so make sure know exactly what they expect of you in order to be able to claim.
• The holiday: A good insurance policy will cover the cost of cancelling or cutting short the trip due to unforeseen circumstances like a home emergency or accident. You will not be covered if you have to cut your holiday short due to business/contractual commitments.
• Yourself: Personal liability cover protects you if someone makes a claim against you for an injury or damage to his/her property.

Travel insurance will NOT cover you in the event of war (although some may cover terrorist attacks), mental/nervous disorders, or self-inflicted injuries.

How much cover should you expect?

According to the Foreign & Commonwealth Office any good insurer should offer you a minimum of £1 million to cover medical expenses in Europe and at least £2 million for the rest of the world. There will probably be insurers offering you astronomical levels of cover to lure you in but there is very little point paying extra for a policy that offers far more cover than you will ever realistically need.

Here are some special circumstances that may require an add-on or separate insurance package:

• Winter sports: Winter sports like skiing and snowboarding can be covered as an optional extra on insurance policies. Make sure you're covered for piste rescue and repatriation (sending you back home) and check the policy details to see if you're covered when off-piste. You can also buy insurance for winter sports as a separate product which may be better if you plan to take on the slopes regularly.

• Adventure sports: As with winter sports insurance, you can usually buy cover for dangerous activities as an add-on to a basic travel insurance policy. Several companies give activities a "risk rating" and the cost of buying an add-on to cover particular activities will depend on which category of risk they fall into. Check with the insurance companies to see what activities are excluded from their basic package and tailor your policy to ensure that you are covered for anything you might end up doing. If you do make a claim you'll need to prove that you took all the correct safety precautions necessary so make sure you're wearing the right protective gear and have a qualified instructor.

• Gap year: Often called backpacker insurance, many insurers offer this as a separate policy to annual multi-trip insurance so that you're covered for a set amount of time of continuous travel e.g. six or  twelve months. Backpacker insurance should include cover for outdoor activities so think about things you're likely to want to do on your gap year like scuba diving and bungee jumping and check that your policy covers them.

• Age restrictions: There are some providers that simply won't cover people over a certain age because they are at a higher risk of having an accident or falling ill. Companies like Help the Aged (Intune), Age Concern and Saga offer specialist policies for older people but do check other providers as the upper age limit varies from company to company. Marks & Spencer have no age limit on their single trip insurance except for people over 80 travelling to USA, Canada and the Caribbean Islands.

• Pre-existing medical conditions: If you have a pre-existing medical condition you will have to pay higher insurance premiums but that doesn't mean you can't find a good deal.  There are specialist travel insurers like Travelbility and Karma Insurance who cover people with pre-existing medical conditions, disabilities or special needs but again it's really important to shop around so that you can compare prices. You must be completely upfront with insurers about any illnesses because they won't pay out on claims if you withhold information.

Get the best deal

• Look here for the best value travel insurance deals

Always read the small print and check the excess that you will have to pay for each claim. Most insurers have policy documents that you can download on their websites so do take a look so that you know the details of your insurance.

Check your existing insurance policies

Look carefully at any policies you're already paying for, like your home contents insurance and car insurance. You may find that these policies already cover you for certain things like driving abroad and loss of belongings outside of the home. This way you can work out what you do and don't need to have covered by your travel insurance and it may mean that you can pay lower premiums.

All UK car insurance policies must automatically provide, by law, the minimum cover required in that European Union country. However this is only third party cover which means it doesn't cover your losses, so it's probably worthwhile extending your current cover to protect yourself fully. Check to see exactly what your car and breakdown insurance policies cover. Some policies include cover in Europe as standard but do check the small print so that you know exactly what you're covered for.

Look out for online discounts. New customers can save 5% on standard premiums at Marks & Spencer.

Useful Links

• Department of Health
• Foreign & Commonwealth Office
• Insure and Go
• Marks & Spencer Travel Insurance
• Travelplan Direct
• Travelbility

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