Travel troubles cost insurance industry £1m per day

Hayley Kirton
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Gales and Heavy Rain Threaten The Festive Getaway
There may have been a lot of claims but one in five still head off on their hols uninsured (Source: Getty)

Those who are still shuddering at the cost of their most recent getaway should spare a thought for the insurance industry.

Research out today has found that insurers shell out £1m every day on claims on travel policies.

The study from the Association of British Insurers (ABI) discovered that travel insurers paid out £365m in claims last year to 494,000 individuals and families.

Medical bills made up the bulk of the claims, with insurers forking out more than £196m to more than 166,000 travellers in need of emergency treatment.

However, the ABI also pointed out that previous research by the Association of British Travel Agents has discovered that more than a fifth (22 per cent) of travellers still trek off uninsured.

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The ABI warned that, while the average travel policy costs just £33 before insurance premium tax, the average claim for medical expenses was more than £1,200, while the average cancellation claim was £800.

"Holidays are meant to be enjoyable and relaxing, but they can be traumatic for some travellers who become ill or are injured abroad," said Mark Shepherd, manager for general insurance at the ABI. "Medical treatment in foreign countries can cost tens of thousands, which is why it’s essential to have a travel insurance policy that will cover you, should you need it."

However, a recent rise in the rate of insurance premium tax is unlikely to encourage the currently uninsured to sign on the dotted line.

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It was announced that the insurance premium tax rate would be raised to 10 per cent in the March Budget, having already been hiked from six per cent to 9.5 per cent in November 2015. The new 10 per cent rate is due to come into force in October.

When the new rate was revealed in the most recent Budget, the ABI called it "disappointing" and, in the run-up to the Budget itself, the association had urged government not to increase the rate as it would hit people who were just trying to do the right thing.

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