What you need to know about travel insurance

Find out the best time to buy your insurance

Sarah Pennells – Virgin Money Living Mentor

by Sarah Pennells | Independent Money Mentor

Founder of SavvyWoman and award-winning journalist

If you’re planning your holiday, travel insurance may be the last thing on your mind. But it shouldn’t be. Here’s why.

Why you need travel insurance

The main reason for buying travel insurance is so that you won’t get landed with a large medical bill for hospital treatment if you fall ill or have an accident. If you’re travelling in Europe (in an EU or European Economic Area country), you are entitled to basic medical treatment if you have an EHIC (it’s a card you can get for free from the NHS). That doesn’t necessarily mean you’ll get all your treatment free. And if you needed to be airlifted to hospital, for example, after an accident, you almost certainly wouldn’t be covered.

If you travel to somewhere like the United States, where there’s no free healthcare for holidaymakers, you could be landed with a bill of tens if not hundreds of thousands of dollars if you need a hospital stay. 

When to buy travel insurance

It’s best not to leave buying travel insurance until the last minute. Why? For a start, you’re more likely to buy the right policy when you’re not making a last-minute decision. But, more importantly, it also means that if you have to cancel your holiday due to sickness or an accident, you should be able to claim on your travel insurance and claim the cost of your holiday back.

How to buy travel insurance

It’s really easy – in theory at least – to buy travel insurance from a price comparison site. However, it’s not just a case of buying the cheapest policy and hoping for the best. Here are my tips for buying travel insurance: 

1. Make sure you have enough medical cover
Medical costs around the world can be eye wateringly expensive, even for the most trivial of conditions, so it’s worth making sure that you’ve got adequate cover. Consider policies with at least £2 million of medical cover if you’re travelling in the EU, and at least £5 million if you’re travelling in the United States as medical costs can be extremely expensive there. 
2. Check how much cover you have if your bags are lost or damaged
Some policies have low limits of just a few hundred pounds, which may not be enough.
3. Watch out if you’re on an activity holiday 
Depending on the activity, your policy may not cover you. It’s not just adrenalin fuelled activities such as bungee jumping or wing walking that you may not be insured for. Something like taking a hot air balloon ride may not be covered if it’s not arranged from the UK before you travel. This varies from policy to policy.
4. Previous illnesses
You may be tempted to be economical with the truth when applying for insurance, but it’s a really bad idea. The reason is that, if you withhold information, the insurer may refuse your claim. It can be difficult to know what’s relevant and what isn’t, so my advice is that if you’re in doubt, tell the insurer. 

Before making financial decisions always do research, or talk to a financial adviser. Views are those of our mentors and customers and do not constitute financial advice.