Travel Insurance: How to Choose the Right Policy for You

Consumer Protection

Don’t choose a travel insurance policy based only on its price, and make sure you have enough travel insurance coverage to cover your needs.

Many people are now making their travel plans for their spring and summer holidays, and savvy travelers know that travel insurance is always a good idea.

If you travel often – as I do – you might want to consider getting annual coverage. My policy kicks in as whenever I leave Hong Kong.

In my case, it might be cheaper to buy individual policies for each trip, but I find it less of a hassle to just write one cheque each year and then not have to think about it – much less fill out more forms and write more cheques, especially since many trips are arranged at the last minute.

Appropriate Levels of Cover

“Having a policy with the appropriate levels of cover will help safeguard against any unexpected eventualities,” says Bob Atkinson, Travel Expert at MoneySupermarket.

Travel insurance shouldn’t just be about price. For some, the cheaper policies don’t provide adequate cover. A family of four holidaying for a week in Spain would need to pay around a few pounds more for a policy that provides suitable levels of cover compared to cheaper less comprehensive policies.”

According to Bob, you should read a policy before choosing travel insurance to make sure that the coverage will be appropriate.

“Additionally, taking out insurance as soon as you book your holiday will ensure you are covered should circumstances arise that prevent you from taking your trip,” he says.

Medical and Personal Liability

MoneySupermarket recommends having at least £2 million worth of cover for medical expenses and £1 million worth of personal liability cover. This means you will be protected against the cost of a doctor’s consultation through to any hospital treatment needed.

“Some cheaper or less comprehensive policies won’t include ‘hospital benefit’ which covers any incidentals you need to pay for in hospital, and holidaymakers are also advised to consider cover for the expenses a family member or friend will accumulate if they stay in the country with you during a hospital stay,” a press release issued by MoneySupermarket says.

Cancellation

If you don’t have annual coverage, you should purchase your travel insurance as soon as possible when booking a trip. Since most policies will reimburse you if circumstances beyond your control prevent you from traveling, you will be protected should this occur. But make sure that the value of the coverage matches the cost of the holiday you’ve booked.

Baggage

Travel insurance policies usually limit how money you can claim if anything is lost or stolen. You should therefore carefully check the replacement value of the things that you will take on your trip. Expensive jewelry, designer clothing, mobile and smart phones, personal computers sports equipment – these should all be taken into consideration.

And don’t forget about the replacement value of the luggage itself!

You should knowing and understand your travel insurance policy’s excess level. Cheaper policies tend to have a higher excess rate, and this can make an insurance claim if the excess amount is the same or less than the amount covered. MoneySupermarket recommends you have at least £1,500 worth of cover in place for lost or stolen baggage.

You should also check to see if certain items – such as personal computers, sports equipment, or jewelry required separate coverage.

Money and Documents

Make sure your coverage for lost or stolen money as well as lost or stolen passports and other documents is adequate. Some policies will even offer assistance if you need to have your passport replaced.

Missed or Delayed Departure

Basic travel insurance policies do not always cover missed or delayed departures so getting stuck in traffic on the way to the airport could be a disaster if you miss your flight. Consider paying a bit extra to ensure that your travel insurance policy will protect you against this eventuality.

End Supplier Failure, Catastrophes, and Strikes

What happens if your airline or hotel goes out of business? If you’re on a packaged holiday, chances are that your travel operator will be responsible for getting you back home or reimbursing you if the trip doesn’t take place.

If you are traveling independently, however, you need to make sure that your travel insurance policy has “end supplier failure” coverage in the event that your airline or hotel goes out of business.

Minimum Recommended Travel Insurance Coverage

MoneySupermarket.com recommends that you have at least the following levels of travel insurance coverage:

£2 million for medical expenses

£1 million personal liability

£3,000 cancellation – or enough to cover the total cost of your holiday

£1,500 baggage

£250 for cash

Policy excesses under £100

Cover for scheduled airline failure and end supplier failure as desirable

Delay cover (e.g. £20/hour for first 12 hours.

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