Posted 01 Sep 2016

The Payment Professor’s Money Musing: What to check with your travel insurance

Millions of people go abroad every year and with travel comes, for most, travel insurance which can be a minefield of small print and figures that is difficult to get your head around.

According to the Association of British Insurers, nearly nine in ten of the people who claimed on their travel insurance policy received an average pay-out of £884 last year. They also found the main reasons that claims couldn’t be upheld were:

  1. The trip was cancelled after the cut-off point
  2. People had failed to let the insurer know about pre-existing medical conditions
  3. No evidence for what the person had lost
  4. Claims fell below the policy excess line

To make sure you’re not caught out by these same issues, you should check what the cancellation part of your policy says. Some insurers allow for flight cancellations, illness or even redundancies and will refund your money, while others are much less lenient.

While insurers will trust what you had in your baggage if it’s lost, they will only count items as stolen if they were taken from your safe deposit box or on you in a safe place. Similarly, you should see if your contents insurance covers your baggage, because it’s silly paying twice for this.

Depending on the value of your holiday, you’ll want to check the excess on your policy. It can hurt a bit paying more, but it’ll lower your premium and keep you protected against any eventuality. Even minor surgery can cost thousands of pounds in Europe, so investing in the right travel insurance can save you a lot of money in the long run.

One of the most common reasons for claims being rejected was people not telling the insurers about any medical conditions they already had. This is a real problem, because although it saves you money on your regular fees, it invalidates any claim that you make in the long run.

Not disclosing an issue is one of the biggest problems that I've seen with Packaged Bank Account claims, as sometimes the bank have failed to tell customers to record with their Travel Insurance provider any pre-existing conditions before signing the up to travel insurance. This is one of the biggest factors in the rise of mis-sold Packaged Bank Account claims.

Have a check over your travel insurance documents and see if you’re paying for the right policy.