Does travel insurance actually pay out?

Think that travel insurance is a bit of a waste of time? After all, no bad luck ever happens to you. And anyway, no one you know ever gets paid out, so why even bother taking out a travel insurance policy? Well, that’s where you’ll want to think twice.

The latest report from the Association of British Insurers (ABI) reveals that travel insurance claims are more successful than you may think.

During 2023, travel insurers received claims at the staggering rate of 66 an hour. In total, they paid out a whopping £511 million to successful claimants.

That’s up 45% compared to the total value of payouts in 2022 and up a whopping 377% compared to 2021, when travel was restricted due to the pandemic.

So, 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.

Why it can pay to get travel insurance

With ABI reporting that the cost of medical expenses in 2023 has exceeded pre-pandemic levels, getting travel insurance for your trip has only become more worthwhile.

The average medical claim was for around £1,724 – more than the cost of your average holiday – showing how much you could be stung for if you fall ill or have an accident overseas.

When you consider that 169,000 people claimed for medical costs last year, sharing a total cost of £291 million in recovered bills between them, you see that’s no small amount.

Kelly Whittington, Travel Claims Director at Aviva highlights that “although cancellation is the most common travel claim, it’s just as important to remember that travel insurance is designed to help you in the case of unforeseen events – which includes medical emergencies.”

Aviva’s average medical claim for its most common claim type – treatment for fevers and infections – came in even higher at £1,929.

So how likely am I to get a pay out?

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.

How can I ensure I have the right cover?

It’s not just as simple as taking out any old travel insurance policy and just assuming you will be covered. You may want to consider the following when looking into a suitable travel insurance policy:

• Carefully check the level of cover a policy provides. While the price may be attractive, the cheapest policy may not be suitable for your travel needs.
• If you’re taking out a single-trip policy, it’s a sensible idea to purchase it the day you book your flights or holiday. That way, you’re covered if something prevents you from going on the trip, not just for anything that may happen while you’re away.
• If you have an annual policy, double-check what you’re covered for ahead of your next trip – winter sports and other activities such as white-water rafting are common exclusions.
• Consider a policy with a cancellation clause that covers you for the full value of your trip.
• Declare any medical conditions to your travel insurer – even if you are unsure.
• Check baggage cover and take note of the clauses around the loss of valuable items such as gadgets, phones, designer clothes and jewellery.
• Do you have cover if your airline or hotel closes down? Having ‘End Supplier Failure’ cover as part of your policy could save you a packet.
• Read the policy to know what you are covered for and what you need to do if things go wrong. There will be clauses covering everything from the consumption of alcohol and drugs to safely taking part in activities.

Finally, once you have bought your policy, keep a note of the emergency number and the policy number somewhere safe for when you travel.

It’s also worth reading the Foreign, Commonwealth & Development Office (FCDO) advice for the country you are travelling to in order to prevent falling foul of any travel limits – some destinations may invalidate a travel policy based on FCDO advice.