No need to break the bank on winter travel insurance

Annabel Denham
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RECENT disasters – from airline collapses to volcanic ash and Hurricane Sandy – have led to disrupted travel plans, increased pressure on travel insurance companies, and vulnerable travellers facing financial loss after independently booking their holidays.

You may choose to spend your winter holiday on a beach rather than white water rafting down the Colorado river, but that won’t guarantee exemption from a hefty bill if disaster strikes. Travel insurance shouldn’t exclusively be about trying to get the lowest price. It may sound simple, but you have to read the wording extremely carefully to ensure that the policy will cover what you need.

Nonetheless, a high proportion of holiday makers run the risk of not taking out travel insurance. It is, after all, an additional cost to what is likely already a huge expense, and a time- consuming process that requires wading through swathes of options. So it is unsurprising that, of the 36m people who took holidays in the 12 months to September 2012, only a third of those going on beach holidays took out insurance, according to Debenhams travel insurance. But travel insurance is a small price to pay to protect yourself from disruption or a financial loss.

Research carried out by the Association of British Insurers (ABI) revealed that the average cost for medical treatment overseas is £2,040. This explains why, of the £400m paid out in travel claims in 2011, £236m was for medical emergencies and repatriation – one of the most common, and expensive, reasons for travel insurance claims.

The European Health Insurance Card (EHIC) will give you state healthcare either for free or at a reduced cost in Europe. But it is not an alternative to travel insurance, which is why the NHS recommends having a valid private policy too. Indeed, MoneySupermarket recommends having at least £2m worth of cover for medical expenses.

Pre-existing illnesses and the high cost of illness-related claims has led to “many insurance companies offering medical screening, either online or offline, to assess your medical condition”, says Greg Lawson of Columbus Direct. Be aware that fairly minor conditions including asthma may be viewed as pre-existing conditions and could prevent you from making a claim. This is why it is better to pay for a policy that takes into account your full previous medical history.

Most insurers will cover either Europe or worldwide, so travellers need to check that they are insured for their destination. According to Moneysavingexpert, Europe-only policies will generally be cheaper than worldwide cover and often stretch the boundaries of Europe to include countries such as Egypt, Morocco and Turkey. But beware some worldwide policies, as they may not include the US and Canada.

Travellers need to carry out research into the place they are visiting to ensure their policy will cover, for example, tropical diseases, political unrest or crime. The Foreign Office website will give you a useful information on specific issues in individual countries.

You can opt for single trip insurance each time you go abroad, or alternatively pay for annual multi trip insurance. If you are travelling more than three times per year – be it on a city break or a month-long excursion – an annual policy is likely to be cheaper. Most insurers will let you upgrade a policy mid-year, although Dan Plant of Moneysavingexpert advises that “it’s likely to be cheaper to think ahead and buy the right policy in the first place”.

Always buy insurance at the time of going abroad, as this will protect you if you are suddenly unable to go, advises Kathryn Ward at First Choice. Don’t fear the worst and pay a steep excess fee – it may not be worth it. Travel agents and airlines will usually try to sell you insurance when you make a booking, but it may be more expensive than going on a comparison website. On the other hand, package holidays will provide cover in the event of end supplier failure or strike cover. Lastly, MoneySupermarket advises taking a minimum £3,000 cancellation cover; £1,500 baggage cover; and £250 cash cover.