What does travel insurance cover you for?

Lots of us take out a travel insurance policy simply because we know we’re supposed to have it when we go on holiday, buying the cheapest insurance available and not giving it a second thought once it’s purchased.

Unfortunately, this can lead to problems down the line – if you don’t fully understand your policy and pick the right one, you could end up without adequate cover.

Remember, you’ll get the most value out of your travel insurance if you buy your policy as soon as you book your holiday. This is because, in general, cancellation cover starts from the moment you take out the insurance.

Does travel insurance actually pay out?

The short answer is yes. Around 574,000 claims were made last year, seeing insurance companies settling at the rate of around £1.4 million a day. On average, payouts came in at £890 per claim.

These claims covered everything from medical claims and cancelled holidays to delayed baggage and lost travel money. However, medical reasons were the largest claim area, with 57% of the total payouts relating to costs such as doctor’s appointments, overseas prescriptions, hospital visits and even repatriation in air ambulances.

The highest bill came to a colossal £124k for an unfortunate traveller who suffered a fall in Spain and required emergency medical repatriation back to the UK. The only thing worse than the pain of the injury would be footing the bill yourself!

Meanwhile, one claimant incurred costs of £67k for treatment for a lung condition, while one person who contracted Covid-19 on their holiday in Cyprus racked up a bill of £70k for treatment and safe travel back to the UK.

While having a GHIC (Global Health Insurance Card) provided some financial cover in these cases, the total costs were all paid out by the travel insurer.

Further challenging the myth that insurers don’t pay out, a separate report from the Financial Conduct Authority (FCA) revealed that travel insurance claims paid out up to 82% of the time in 2022, with a 73% success rate for single-trip policies, 76% for annual European cover and 82% for annual worldwide policies.

The main reasons for failed claims are either claiming for a travel delay before it reaches 12 hours and claiming for things not covered in the policy.

What does a basic travel insurance policy cover?

It’s important that the travel insurance policy you choose covers you properly for the holiday you are planning.

Extras can be added on to suit your needs, which you can discuss with your insurer. You might want to consider a policy that includes similar cover to the following (each area is explained in more detail below):

A word to the wise: while a cheap travel insurance policy might save you money initially, it could end up costing you more in the long run if you don’t take out sufficient cover.

Medical expenses cover

Emergency medical treatment can be incredibly expensive abroad, so it's very sensible to take out adequate cover as a part of your travel insurance policy. The Foreign Office recommends medical cover of £1 million for Europe and around £2 million for the rest of the world - you might also want to consider a policy that includes repatriation to the UK (transport home) for medical reasons.

If you’re planning to travel while pregnant, check the terms and conditions of your policy very carefully. The average insurance company will cover a woman up to around 24 weeks, but it can vary from broker to broker.

You can protect yourself further by applying for a European Health Insurance Card (EHIC) – this is not an alternative to travel insurance, but provides you with the right to access state-provided healthcare abroad at a reduced cost or for free, and includes treatment of any chronic or pre-existing medical conditions that become necessary during your trip. Some insurers actually insist that you have an EHIC before they will cover you.

Personal liability

If you injure someone or damage their property while away, even if it’s an accident, they could make a claim against you. If you have personal liability cover, you'll be protected against this.

Consider looking at a policy that will insure you for up to £1 million - including any compensation owed to the claimant - and for any legal costs involved.

Cancellation

Occasionally something out of your control can occur, leaving you unable to travel or in a position where a holiday must be ended prematurely – for example, losing your job or a relative falling ill.

A basic insurance policy will usually cover you for up to £3,000 of the cost of your holiday should you not be able to travel. Consider a policy which will cover the total cost of the trip.

Check your policy carefully, however, as there will be limitations on what you’ll be able to claim for.

Delays

Delays are the bane of a traveller’s life, but unfortunately they do happen. If you’re delayed for over 12 hours, your travel insurance should provide compensation – this can also cover items such as a night’s stay in a hotel or an evening meal. Make sure you check what your insurance policy covers and keep all receipts to prove your spending.

If you are delayed for less time than this, there are still other avenues you can take to get some money back – read our article on flight compensation for more details.

Missed departure

If you miss your flight due to circumstances outside of your control, you should be able to claim compensation through your travel insurance. Scenarios can include delayed public transport, traffic accidents and vehicle breakdown. You might want to consider a policy with a minimum of £500 cover for this.

Note, however, that you won’t be able to claim if you cannot show that you set off with sufficient time to spare. Try to collect official documents as proof: for example, police report for accidents, tickets for delays or a breakdown report from your roadside recovery provider.

Lost baggage and belongings

One of the most frustrating scenarios in travel has to be arriving at your destination when your luggage doesn’t. Not just because you’re faced with the prospect of a holiday without your things, but also because the airline responsible will generally do its best to pass the buck.

A comprehensive travel insurance policy can offer some assistance in such circumstances. You may wish to consider a policy that covers between £1,500 and £2,000-worth of lost belongings. This is usually enough for most travellers, but it can fall short if you have something particularly valuable in your luggage.

Swerve this pitfall by insuring valuable items separately (such as jewellery, for instance) or leave it at home where it should be covered by your household insurance, if you have it. You can also insure your holiday cash. You can also avoid this problem by keeping valuable items with you in the cabin when you fly.

As well as loss, this part of your travel insurance policy can also cover damage and theft – again, check the small print!

Understanding your travel insurance policy excess

This is the amount you, the policy holder, will pay out in the event of a claim. Understanding this bit is vital to ensuring you get the right deal on your travel insurance policy.

For example, if you make a claim for £1,000 and the policy excess is £200, the insurer would only pay out £800.

How the excess works can vary from policy to policy: some have a one-off excess for the whole claim, while others charge excess for different sections of a claim (for example, if you needed medical attention and claimed for the loss of personal effects, you may be charged two separate excess amounts).

What can void your travel insurance cover?

Not declaring pre-existing medical conditions

While it can be tempting to hide pre-existing conditions from your insurer to keep costs down or to assume that, as you haven’t had problems for a while you don’t need to disclose them, it is essential to give your insurer a true picture of your medical history.

If not and something were to happen while you were away causing you to claim, your insurer has the right to request access to your medical records. If they find anything that you haven’t declared, your claim could be deemed invalid.

Not taking reasonable care of your possessions

If you plan to take large amounts of cash away with you, or if you tend to leave cash in your room while you are out on holiday, check your policy wording carefully to find out whether you would be covered should it be lost or stolen.

Many policies will only cover theft or accidental loss of cash that went missing while on your person, or money that was locked away securely in a safety deposit box in your room.

Not reporting a theft straight away

Just in case you are unlucky enough to have something stolen, familiarise yourself with the procedure your insurance provider would like you to follow so you can stick to it and make your claim as effortless as possible.

Many insurers specify a time period that they wish you to report a theft to the police within – usually 24 or 48 hours after the incident. If you report it later, or simply don’t get a police report, you won’t be covered.

Activity exclusions

If you are planning on taking part in any activities while you are away – such as mountain biking, bungee jumping or quad biking – check your policy to see whether you would be covered should you have an accident.

Many insurers have a list of “hazardous” activities that they don’t cover – but what is classed as hazardous differs between providers so it’s worth checking your individual policy, even if you have been covered for the activity before.

And while you may assume this just applies to extreme sports, you may be surprised to know that you may not be insured to drive the nippy moped that you hire to get around as travel insurance policies tend to have some exclusions around two-wheeled vehicles – many specify that they won’t cover you when you ride a motorcycle over 125cc.

Winter sports cover is also often not included within a standard travel insurance policy, so if you are planning a ski trip or a snowboarding holiday, check whether you need to add this on.

Not checking duration and destination

Whether you are planning an extended trip-of-a-lifetime or are packing your backpack for a trot around the globe, before you take a policy out, check how many consecutive days abroad you will be covered for. Limits vary from provider to provider and if you go over the time period – even by a day – your insurer won’t pay out for a claim.

And it may sound obvious but check that your policy covers you for the destination you are travelling to before you take it out.

Turkey and the Canary Islands are destinations to take into careful consideration when choosing a policy as some companies such as Columbus Direct cover travel to them under their European policies while companies including the Post Office exclude them from certain European policies.

Similarly, if you are taking out a worldwide policy and are travelling to the USA, Canada or the Caribbean, check that you have the correct worldwide cover.

How to make a successful travel insurance claim

1. Use the helpline

If something goes wrong you can, of course, refer to your policy – either from a print-out or online. But, if you are in any doubt, be sure to ring the helpline provided – this is essential with medical claims so that the insurer can make sure you get the best treatment and assistance.

The insurer’s helpline is also useful for verifying the steps you need to take to make a successful claim and to double check that you are actually covered for any incidents that have happened.

2. Make your claim in time

All travel insurance claims must be made within the specified timeframe detailed in your policy. Most companies state you must register a claim within 28 to 31 days of returning home, otherwise a claim cannot be considered. You then have a second period of time (which does vary) to get a written claim in to your insurer.

Keep in regular contact with your insurer if you are facing delays in making your claim for any reason.

3. Keep all supporting evidence

All insurance claims will need supporting evidence, including police reports for lost or stolen luggage, travel invoices for cancellations and written confirmation about a travel delay from your holiday company.

The small print of your policy will detail what is required so you can gather the relevant evidence while you are away if required. If in doubt, call the helpline and ask for advice.

It also pays to take photos and videos, as appropriate, for your claim to support your account of what happened. Plus, if there were any witnesses, you can also take a note of their details to supply to your insurer.

Send all of your supporting evidence, along with your claims form, to your insurer and keep copies for your records of these along with all communication you make.

4. In dispute?

Once you have made your claim, if you find you are in dispute with your travel insurance company you can use the Financial Ombudsman service – around 50% of all cases are found in the customer’s favour.

Extra cover to be aware of

• We’d seriously advise you ensure your holiday is ATOL-protected, but if it’s not then you may wish to include cover for ‘scheduled airline failure’ or ‘end supplier failure’ insurance – this covers you in the event that an airline or other travel company fails financially, so that you’re not left completely out of pocket.
• You should check that you are covered for winter sports (skiing and snowboarding) and for other activities (trekking, sailing etc), if you know you will be participating in anything that might be deemed out-of-the-ordinary by the insurer. You are likely to need extra cover for this, which you should discuss with your broker.
• There are many other areas of cover you can add on to a policy – any additional cover is likely to raise the premium you pay, but will almost certainly save you money should you need to use it. For more general information about travel insurance, see here.

Travel insurance FAQs

Will I be covered for day trips, excursions, and holidays with multiple destinations?

Most polices will cover you for excursions – travelling to another country for a short period of time as part of your holiday – but you should always check with the insurer first.

If you are planning a multi-centre holiday, you would usually take out a single-trip policy for the country that is furthest away geographically while confirming with the insurer that all other countries are insured as well. Alternatively, you can take out an annual policy which covers all the countries you’ll be visiting.

Standard travel insurance policies may not cover you for activities which are deemed to be dangerous, such as helicopter rides, mountain climbing, scuba diving and sky diving, so adrenalin junkies should talk to their insurer about what they plan to do, or look into specialist cover.

Alpine sports are not likely to be covered either. For ski holidays, you may need a comprehensive winter sports policy that will cover you in the event of an accident on the slopes.

Am I covered if something happens to me while I’ve been drinking alcohol?

Travel insurers usually insert a clause into their small print that will rule out a claim that involves drink or drugs. However, this is often judged in a case-by-case manner. Before the claim is rejected, the insurer will look at the level of alcohol in the claimant’s blood at the time to see whether or not it was reasonable. It may also depend on the nature of the claim.

I have a GHIC, do I need travel insurance?

Your GHIC entitles you to reciprocal healthcare in countries within the EU that take part in the scheme. However, it is important to understand that this is not the same as travel insurance. For example, if you needed to be repatriated (flown home) or a member of your family had to stay by your bedside during your time in hospital, your GHIC would not cover these costs, whereas a travel insurance policy would.

You should take out a comprehensive travel insurance policy before you travel; additionally, make sure that your GHIC is still in-date. You can apply for a new GHIC on the NHS website.

How is payment arranged for my medical bills if I am taken ill?

Payment is arranged depending on the condition you are being treated for. Payment for all major conditions is picked up by the insurer at the time; however, they will need to be informed as soon as you are admitted to hospital.

Minor treatments, such as a doctor’s appointment or a prescription for medication, are usually paid for directly by you. Upon your return you can make a claim to your insurer for reimbursement.

As always, check your insurer’s protocol for such incidents before you travel. We also recommend travelling with a credit card so that you have financial cover in the event of an emergency.