Eight things to check in your travel insurance

Recent events prove that going on holiday isn't always the relaxing experience it is supposed to be. And then there's the worry about whether you are covered by insurance. Here, Ruth Jackson explains eight things to look out for when buying travel insurance to make sure you're covered.

It is getting harder and harder to get away on holiday.

If it isn't strikes holding you up these days it is volcanoes, and if it isn't them it is other people's political troubles. Now might not be the time for a city break in Athens for example, and it certainly isn't the time for a trip to Thailand.

Recent riots in Thailand have led the Foreign and Commonwealth Office (FCO) to issue advice against travelling to the country. That's bad news in that it means you probably won't want to go any more but it also means that if you do go, your travel insurance won't be valid. If the FCO has told you not to go somewhere, insurers won't bail you out when you do.

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Why bother with travel insurance?

Recently the news has been full of stories about what travel insurers aren't paying out for. There are disputes over what insurers will cover when it comes to volcanic eruptions for example (act of God or not?) and on their obligations over cancellations in general. Add that to not being covered if you go anywhere dodgy and it could all leave you thinking there is no point having travel insurance.

But the primary reason to have travel insurance is to be sure you will be looked after if you fall ill or even die abroad. Cancellation cover is secondary to that.

A news story last month told of a couple of women caught trying to smuggle a body onto a flight to Germany. Why they tried it remains unclear but I wouldn't be surprised if it was an attempt to avoid repatriation costs those related to getting an ill person or body back home. According to a study by travel insurance specialist AllClear, last year it cost £25,000 on average to get someone home.

Factor in the daily cost of a foreign hospital stay around £200 plus medical expenses, according to Lisa Bachelor in The Guardian and the purpose of travel insurance becomes clear. You could avoid all those costs with a travel insurance policy that will cost you less than £30.

What to look for in your policy

When you are shopping for a travel insurance policy there are several things you need to consider:

1. Annual vs single trip policy

A single trip policy is the cheapest option and certainly the one to go for if you only holiday once a year. But if you go on holiday twice a year or more, an annual multi-trip policy will be more cost effective.

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2. Extreme sports cover

If your idea of a holiday is lying on a beach or gently strolling around the local landmarks, extra sports cover won't be necessary. But if you want to ski, scuba dive, bungee jump, windsurf etc. you'll need to pay a bit extra on your travel insurance. Make sure whatever sport it is you plan on doing, you are covered.

3. Personal liability cover

This covers you if you cause injury to someone else, or damage their property, and they decide to sue you.

4. Medical cover

The cost of getting treatment abroad quickly mounts up removing an appendix costs around £7,500 in Europe, but closer to £25,000 in America. Most policies cover expenses up to between £2m-£10m. Make sure your cover is somewhere between those two figures.

5. Repatriation cover

Make sure the money comes out of your insurer's wallet and not yours.

6. Cancellation or curtailment cover

The main worry for most of us these days is that for some reason our trips will be cancelled or shortened due to reasons beyond our control. Make sure your insurance policy covers you for any such eventuality many policies only cover you if you have checked in, for example.

7. Lost luggage

This option isn't an essential, but one to consider. In return for a slightly more expensive policy you can get your luggage insured so that if it ends up on the wrong side of the world, you'll get some money to cover the loss. You may also get a daily amount if you are abroad and are left without your luggage. Think carefully before you pay out for this one, though.

Airlines have to compensate you if they lose your luggage. Admittedly, the amount they pay is based on the weight of the luggage rather than what is in it, but if you are travelling with just clothes and non-valuables, insurance might be a pointless expense.

8. Cash and valuables cover

Finally, if you like to have all the latest gadgets and a lot of cash with you when you're abroad, then you can get those items insured against theft or loss on your travel insurance. But before you do, check whether the valuables are covered under your home contents insurance.

You might also exercise a little common sense instead of paying for too much extra insurance: keep cash in a hotel safe and take it out only in small amounts, for example.

Once you've considered all these points, hit the comparison sites to find the best policy for you. Moneysupermarket.com, Uswitch.com, Confused.com and Gocompare.com all have travel insurance comparison tools.

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Ruth Jackson-Kirby

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings and credit cards to pensions, property and pet insurance. 

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping among many other titles both online and offline.