Travel insurance explained

There's a lot to organise when you're going on holiday, but organising travel insurance should be high on your “to-do” list. With so many companies out there offering so many different options, it can be difficult to break through the jargon and find the right policy. Our guide should help you find the right option for you.

Falling ill while overseas could be disastrous for your bank balance if you don't have travel insurance.

If you fall ill on holiday, or require treatment or an air ambulance back to the UK, costs could easily run into thousands of pounds. An air ambulance from the east coast of America, for example, could cost between £35,000 and £45,000, according to the Foreign, Commonwealth and Development Office (FCDO). So, as a general rule, consider a policy that covers for medical expenses of at least £2million. Be sure to double check that your policy will pay for an air ambulance back to the UK should you need one.

If you are travelling to Europe, you must also ensure that you take your free GHIC (Global Health Insurance Card) with you. This will give you the same rights as local residents to medical care, although it doesn't include things like emergency repatriation.

If you are in an accident, or a member of your family falls ill, you might have to cancel your holiday.

And if you can’t go, you will generally stand to lose the money paid out for your trip.

Cancellation cover can protect you against this, as long as you have it when the event occurs. That’s why it’s a good idea to buy your travel insurance when you book your holiday. This way, you will be covered for anything that happens in the run up to your trip as well as during it.

Always ensure that cancellation cover is equal to or greater than the value of your booked travel arrangements.

When choosing your policy you should also consider the type of policy, excess levels and exclusions.

Single-trip/multi-trip: As you might expect, a single-trip policy does provides you with cover for one, specific trip. However, if you are taking two or more trips over the course of a year, it may be more economical to buy a multi-trip annual policy. This means that you can take a number of trips over the course of 12 months without needing to take out separate policies each time.

Exclusions: Every policy has exclusions and it's important that you are aware of exactly what they are before purchasing.

Common exclusions include risky winter sports and claims for drink- or drugs-related incidents. If you want to take part in excluded activities, you therefore need to look into taking out a specialist policy or adding extra cover to your existing one.

Excess levels: All policies will have some form of excess, which is the amount an insurance company will deduct from any claim you make. Excesses can be as high as £250 and as low as zero, but will vary from policy to policy and across the areas of cover. That’s why it’s essential to check them! Generally speaking, the cheaper the policy the higher the level of excess you will have to pay.

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