What should travel insurance cover?
You never think it’ll happen to you. Lost bags, cancelled flights, travel scams, even airlines going bust. But after a run of bad news for travellers, the odds aren’t always in our favour.
Ryanair’s thousands of flight cancellations seemed bad enough, only to be followed by Monarch folding altogether, affecting hundreds of thousands of bookings. Last month, check-in software problems left airports briefly in chaos too with passengers missing planes as a result – not to mention BA’s IT meltdown earlier in the year.
It always amazes me when people don’t have travel insurance at all – but as many have been discovering, even if you think you’re covered, you might find your policy lets you down just when you need it.
Over two thirds expect insurance to cover the cost of rebooking a missed flight and all connected travel and accommodation expenses, while half think it will cover them if they miss the flight after arriving late or because of increased security – sadly, that isn’t the case with standard policies.
So I suspect I’m not the only one who’s been checking the small print of my own annual cover recently for exclusions and taking some tips from the experts to work out just what should travel insurance cover?
Travel insurance cover: Airlines going out of business
If your policy covers scheduled airline failure, you should be covered for the costs of the flight (if you haven’t travelled) or the cost of a flight home otherwise, according to Travel Insurance Explained.
If it covers ‘end supplier failure’, you’ll get the same protection for the cost of your flights but also hotels and car hire, for example, which can no longer be used.
Most standard travel insurance won’t cover you if the airline – or tour operator/travel agency – ceases trading altogether, and may not for consequential losses.
Travel insurance cover: Missed flights
Not all policies cover missed departures and usually only in situations outside your control, such as being involved in an accident on the way to the airport (be prepared to prove that). Even fewer will allow a claim if you’ve missed the flight due to queues at passport control or check-in.
Airlines may need to pay out compensation if it’s down to their software malfunctioning for instance, unless the problem is classed as an extraordinary circumstance. You are also – currently – covered by EU legislation for delayed and cancelled flights but that’s the responsibility of the airline rather than the insurer, although most include some limited cover for travel delay or trip disruption, to let you get food/drink in the first 12-24 hours.
To make sure you’re covered outside the EU or under other circumstances, check for one which provides missed departure and missed connection cover for ‘any cause beyond your control and you are unable to claim back from any other source’.
Travel insurance cover: Cancelled holiday
What if you need to cancel your holiday – perhaps because you’ve fallen ill, or a member of your family has and you need to return? Check the cover for travel abandonment or ‘cancellation and curtailment’: and how the insurer defines the reason – is it only members of the family becoming ill for example, rather than close friends?
A good policy should cover £2,000 or more – ideally the entire cost of the holiday. Best of all is one which covers ‘cancellation for any reason’.
Travel insurance cover: Illness abroad
It goes without saying that you should declare any pre-existing conditions, as otherwise you’re unlikely to be covered while you’re away. If you’re pregnant, you may also need a doctor’s note to allow you to fly during the third trimester.
Within the EU, make sure you have an EHIC – it won’t necessarily cover the entire cost of your medical bills (you’re entitled to the same level of cover as citizens of that country, not 100% free medical treatment) but some insurers may refuse to pay out if the treatment would have been covered.
Otherwise insurers recommend £1-2 million of medical cover, which should include repatriation in case you need to be flown back to the UK – essential if you’re travelling off the beaten track, but also in the USA for example, where medical bills can mount alarmingly for relatively minor situations. Some policies only go up to £60,000.
Travel insurance cover: Lost or damaged baggage
Although you’re unlikely to have a standard policy which doesn’t cover your luggage, this is one where it can vary enormously – both in what’s included and what you need. Experts recommend a minimum payout of £1,500 if your bags or personal possessions are lost, damaged or stolen but around a quarter of single and annual trip policies have a limit of £1,000.
However, check whether there’s a limit for individual items, such as jewellery, cameras or laptops as these can often be lower than you might expect. Stolen cash is also normally capped.
Any losses will need to be reported to the police, usually within 24 hours, or damage reported to the airline straight away if you’re going to successfully claim later – and no-one will cover you if you forgot your bag and left it on the beach all night with your valuables in…
Some will also give separate cover for expenses incurred if your passport is lost, such as additional nights accommodation while replacing it.
If your bags have been delayed en route, the airline would normally be liable for compensation up to a certain limit – but as I discovered when my bags got held up on the way to Madagascar, the 100 Euros I was entitled to from the airline didn’t go very far at all. And not all policies offer any cover for late arriving bags.
Travel insurance cover: What’s the excess
Take a look at the excess you need to pay – and how many. Some policies will have a single excess payment, others will have one per category: so if you were robbed and hurt in the process, you might end up with two excesses.
Even if you’ve only a single one to worry about, if the maximum item payout is £250 and you’ve got an excess of £150, suddenly a cheap policy isn’t a bargain.
If you have a family policy, which is often the most cost-effective way to cover kids, again it’s worth checking if you have to pay a single excess or one per person – if you all have to cancel the holiday, it could lead to multiple deductions.
Travel insurance cover: Where are you covered?
Some policies will apply to Europe only, others will have worldwide cover, but if you’re planning to go skiing or other ‘high-risk’ activities, you may need additional insurance. If you’re taking a long trip or travel frequently, there’s usually an upper limit on the number of days you can be away during an annual policy.
Travel insurance cover: Natural disasters and conflict
With the greater threat of terrorism and natural disasters from hurricanes to floods, many insurers won’t cover these (thankfully still rare) eventualities – although after the ash cloud grounded planes following the 2010 volcanic eruption in Iceland, it’s more likely to be included.
Always stick to the Foreign Office advice – not least because you’re highly unlikely to be covered if you travel to a destination which the FCO advises against.
Travel insurance cover: Have you got cover already?
If a comprehensive travel policy is starting to mount up, it’s worth checking the cover you already have – home insurance may cover personal possessions, for example, while separate mobile policies may be valid abroad.
And you do have some guarantees if you use a credit card – if you make a purchase of over £100, your costs can be reimbursed under Section 75 of the Consumer Credit Act. However it won’t cover you for associated costs – you might get the price of the original flights back, but not money lost on accommodation or the difference if you book new, more expensive flights.
Book through a reputable UK tour operator, travel agent or airline and you should have ATOL or ABTA protection – but it isn’t 100%. Booking a package holiday, ensures certain guarantees in terms of protection – but if you’re booking flights only, or an airline which offers hotels, you may not have this legal protection. This page from the CAA outlines the exceptions, while ABTA has its own helpful list.
Travel insurance cover: What else?
Always have your insurance when you book your trip, or buy at the same time – policies bought afterwards may not cover you.
It’s worth considering how easy it’ll be to make a claim – if you’re half-way around the world, does your insurer have a 24-hour helpline; even better a Freephone number or perhaps online chat if you’re likely to have internet connection.
And will you need reams of paperwork and receipts, or does the process sound straightforward?
In some cases, you may want to consider personal liability in case you injure someone else or their property – perhaps while skiing. This wants to be £1 million or more.
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Disclaimer: I am not an insurance professional and any claims are going to depend on circumstances – if you’re a nonagenarian rock climber, that’s amazing but you’ll need bespoke advice. The above is based on advice from experts and existing laws/regulations and is correct to the best of my knowledge. I hope you never need it…
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