The ultimate guide to travel insurance
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“If you can’t afford travel insurance, you can’t afford to travel.”
This is a saying you may have heard in the past and here at TPG U.K., it’s an adage we really believe in. Ideally, you will never have to actually use your travel insurance while you travel, but if something unexpectedly goes wrong, you will be very grateful you have it.
Policies can be complex to select, understand and claim for — so here is our complete guide to travel insurance for U.K. travellers.
What is travel insurance?
Travel insurance is where you hold a policy that you either pay for or it may be provided as part of a premium credit or charge card you hold, which protects you from unexpected costs and inconvenience when your travel does not go as planned.
It can cover something as minor as a flight delay through to something as serious as major medical assistance while abroad.
TPG’s Katie Genter explains the major categories of travel insurance policies are likely to cover:
Reimburses your pre-paid, non-refundable expenses if you cancel your trip due to a covered reason. Offered by most policies, it’s usually based on the cost of your pre-paid, non-refundable trip.
Reimburses you for the unused, non-refundable portion of your trip and for the increased transportation costs it takes for you to return home due to a covered reason. It’s offered by most policies, but is usually dependent on the cost of your pre-paid, non-refundable trip.
Provides benefits for losses due to covered medical and dental emergencies that occur during your trip. Offered by most policies, usually with a low cap on emergency dental care.
Coverage for an accident resulting in death or dismemberment while on your trip. Offered by most policies.
Emergency medical transportation
Emergency medical transportation arranges and pays for the cost to medically transport you to an appropriate medical facility to receive care and to get you home after you have received care. Coverage may also pay for the costs of a visitor’s economy-class, round-trip transportation to the covered person’s bedside. Offered by most policies and usually requires pre-approval and arrangement by the provider.
The political evacuation benefit can be used to transport you to the nearest safe place or your residence under specific conditions. Not offered by most policies, and policies that do offer this benefit often have many exclusions.
Covers loss, damage or theft of baggage and personal effects. Offered by most policies, usually with a low cap on high-value items such as electronics.
Reimburses the purchase of essential items during your trip if your baggage is delayed or misdirected by a common carrier. Offered by most policies, but some require up to a 24-hour delay before allowing any reimbursement.
Reimburses you for additional expenses due to a covered delay. Some policies may also cover lost pre-paid trip expenses due to a covered travel delay. Offered by most policies after a six to 12-hour delay.
Change fee coverage
Provides reimbursement for fees to change the dates on your airline ticket. Only offered by some providers on some policies.
Loyalty programme redeposit fee coverage
Coverage for frequent-flyer mile redeposit fees in the event of a covered trip cancellation. Only offered by some providers on some policies.
24-hour hotline assistance
An assistance team that’s available to help you handle all kinds of travel emergencies. Offered by most policies.
Provides personalised information about your destination and assists you with obtaining restaurant reservations, tee times and tickets to events. Offered by some policies.
Rental car damage protector
Provides primary collision/loss damage coverage for physical damage to a rental car. Offered by most policies for a per-day, add-on fee.
Cancel/interrupt for any reason
Provides trip cancellation and interruption coverage for any reason. Offered by some policies and can be added to some policies for an additional fee.
Cancel/interrupt for work
Provides trip cancellation and interruption coverage for covered work-related emergencies. Offered by some policies and can be added to some policies for an additional fee.
Lost ski days/lost golf rounds
Reimburses you for lost ski days or lost golf rounds, as well as for equipment rental expenses if your equipment is delayed by a common carrier. Not offered by most policies.
Related reading: What to do when you miss your flight
Complimentary policies versus purchased policies
Some premium credit cards will provide travel insurance as a complimentary benefit of the card. For some travellers, this could be sufficient to rely on for your travels. However, be aware that these complimentary policies may have lower limits, more exclusions and stricter qualification conditions than purchased policies (see below for further explanations of limits, excess and exclusions).
One critical condition of your card’s complimentary insurance may be that only items purchased on the card may be covered by the policy. For example, if you purchase airfare from the U.K. using the card and the flight is delayed, you may be covered, but if you then pay cash for expensive jewellery during your trip that is stolen, this may not be covered.
Given most credit cards in the U.K. charge foreign transaction fees of up to 3% on purchases made in foreign currencies, you may not be planning to use the card while actually abroad. Do keep in mind that this may mean you cannot rely on the complimentary travel insurance for every situation. The card may also need to be active (and paid up) in order to make a claim. So if you purchase a flight nine months in advance using a premium credit card and then cancel the card before you take the flight, you may not be able to rely on the travel insurance provided by the cancelled card.
Some travel insurance benefits provided by American Express are subject to enrollment.
Related reading: What is the best card to use while travelling abroad?
Note that not all cards provide extensive travel protection even when you book your travel using the card. So, if you’re using a card without travel protection or a card that only offers limited travel protection, you may want to purchase travel insurance. Just because a card offers travel protection doesn’t mean you will be covered. In particular, travel protection usually only extends to select relatives of the cardholder. So, friends (including boyfriends and girlfriends), employees and other relatives may not be covered.
If you want evacuation insurance for non-medical reasons, you’ll want to purchase travel insurance that covers non-medical evacuations. However, be sure to read the benefits guide closely, as even non-medical evacuation benefits may not cover every type of evacuation you might need. For example, some policies don’t cover evacuation from an area that had a travel warning when you booked your trip or evacuation from an area that’s suddenly inaccessible due to a landslide or other environmental incident.
If you simply want extra assurance that you’ll be covered, then purchasing travel insurance may provide comfort that is worth the price of the policy. However, you may find that each insurance wants you to file with the other insurance first if you have multiple coverage options.
Related reading: Trip wrecked: 7 ways to prepare for any kind of travel disaster
For any of these reasons, you may decide to purchase an independent travel insurance policy instead — or as well as. These will usually not have any strict obligations regarding which payment method is used for expenses and may provide you with the flexibility and peace of mind that your complimentary insurance, no matter how good the marketing material, cannot.
While you will not know in advance what claims you might make under a policy, travel insurance may not be something to cheapen out on. Don’t just choose the absolute cheapest policy you can possibly find given just how seriously you could be relying on it if something goes horribly wrong while you travel.
Choosing the right policy
If you’re considering purchasing a travel insurance policy, be aware that the cost of these policies, being what is called the “premium” you pay in exchange for coverage, varies hugely.
For starters, you’ll be asked to choose between a single trip or annual cover. This is fairly self-explanatory — single trips will cover you for a single trip abroad. For example, a week’s holiday in Spain. You’ll be asked to choose how many days the trip is — longer trips will cost more as there are more days of insurance to provide.
Annual policies cover multiple trips within a year — i.e. where you are returning to the U.K. and then commencing on another, separate trip. If you travel regularly you may wish to consider an annual policy rather than buying a series of separate policies — it may save you money overall. Annual/multi-trip options will have different prices depending on the maximum length of each trip. An annual policy covering trips of only seven days in length will be cheaper than a policy covering 45-day maximum trips.
As you are searching for a policy you will be asked specific questions in order to obtain a quote and these factors alter the price significantly:
- How many people will the policy cover: Family policies will be more expensive than policies for a single person, as there are more people to cover.
- Age of each traveller: The older you are, the more you will pay for your coverage as providers believe you will be more at risk of requiring medical assistance.
- Where you are travelling to: You’re unlikely to have to list every single country if you’re planning to backpack around South East Asia for a month in order to find your quote, but medical costs especially vary enormously from country to country (never get sick in the U.S. without coverage), so you will be asked to choose broad regions you want the policy to cover.
- What activities you want covered: If you want to be covered for something with a moderate or higher level of risk, such as downhill skiing or mountain climbing, this may increase the premium.
- Valuable personal items: If you want that fancy (and expensive) new phone or laptop you’re planning to take on the trip covered, you will need to disclose this when searching for a policy.
- If you are already travelling: Most policies are conditional on the travel having not yet commenced. However, if you have forgotten to set up your coverage before your trip, there are providers that give out special policies in these situations. Expect the premium to be significantly more expensive than the same policies for those who have not yet started travelling. There will also be waiting periods — if your suitcase full of valuables has been stolen abroad and you have no travel insurance, don’t think you can just jump online, find an “already travelling” policy and make a claim straight away. Insurance companies aren’t that foolish.
- If you have existing medical conditions: You need to be honest about your health and medical situation. Most policies won’t cover pre-existing medical conditions, or if they do, the cost of the premium may increase significantly.
Related reading: When you get sick on a plane, the airlines call this company
Limits, exclusions and excess
Once you have submitted the information above, you will be provided with a series of quotes that will differ in price premiums based on limits, excess and perhaps exclusions. Let’s look at these one at a time:
- Limits are the maximum amount the insurer will pay out for a claim per category/event. The higher the limit, the higher the premium. For example, a policy with a limit of £50 million in liability cover may cost twice as much as a policy that only has a liability cover of £10 million. You can’t predict the future so it’s impossible to know exactly how much limits you will need for something like legal liability (if you knew what you would need it for you would prevent the event occurring in the first place!), you can make a decision on the level of limits you are comfortable taking on coverage for.
- Excess is the amount you must pay for each claim before an insurer will pay out anything. You can choose to pay more for a £0 excess policy, meaning you will not have any out-of-pocket expenses for successful claims within the policy limits. If you are making a claim for £40 total and the excess on your policy is £50, you may as well not make the claim at all. Or, the standard excess may be £50, whereas you could pay £75 extra premium for a £0 excess policy. If you make no claims you would be £75 worse off by paying for no excess but if you made two claims you’d come out £25 ahead by choosing this option. It’s up to you how much risk versus peace of mind you are comfortable taking on.
- Exclusions are items and circumstances that will void a claim. For example, there may be an exclusion to driving a vehicle with higher than the legal alcohol limit that could void claims relating to that vehicle. If you crash it when you are drunk, the insurer will not payout. Perhaps the most common exclusion is pre-existing medical conditions. While some policies may have different premiums for different exclusions, it’s more likely that a long list of the same exclusions will apply to all policies from that provider. You will likely have to be a resident of the U.K. to be able to claim under a policy issued by a U.K. insurance provider.
Now the fine print of these policies can be long, complex and dull to read, but it’s very important you understand exactly what you are buying, what is covered and what isn’t. Don’t assume every single item, situation or expense will be covered by a card’s travel insurance, or that every policy will be the same regardless of the credit — or charge — card. The coverage and conditions may be different from what you are used to from another insurance policy. Indeed, the terms and conditions of the travel insurance offered by American Express U.K. differs from card to card. This information should be provided with your welcome pack when you receive your new card and will also be available on the card provider’s website. Ensure you have the terms and conditions for the insurance for the exact card you hold.
Car hire may be covered, or it may not. You may be covered for lost baggage only, or it may also include delayed baggage. Valuable personal electronics like laptops or mobile phones may need to be registered separately in order to be covered.
I purchased a ticket to a music festival in France last year as well as the associated flights, transfers and accommodation. The festival was unexpectedly cancelled a few weeks in advance. While I was refunded the festival ticket price by the event organisers, I was out of pocket for the other associated expenses. I made a claim on my travel insurance, assuming that the cancellation of an event (beyond my control) would be covered. But I hadn’t read the terms and conditions of the policy carefully enough and my claim was rejected because the circumstance was not covered.
You will need to sign a declaration when submitting the claim that you are not aware of things that may be excluded such as pre-existing medical conditions. Insurers employ experts to carefully check each claim so do not try and be untruthful (especially regarding pre-existing conditions). You could end up with a legal bill from your insurer, too.
Related reading: What’s inside an aeroplane’s emergency medical kit?
Check reviews of your provider
As part of your homework, check the online reviews for the travel insurance provider you are either considering purchasing from or providing the complimentary cover from your credit card.
But take these reviews with a pinch of salt. Unlike reviews of a gadget purchased from Amazon, the vast majority of people who take out travel insurance won’t leave a review. Why? Because their experience is perfectly fine, without being memorable enough to leave a review. Most people leaving reviews will be those who have an axe to grind because they had an unpleasant experience. For this reason, all insurance providers may have seemingly low reviews.
Don’t let this put you off — this is the same as with hire car companies. Even the world’s biggest hire car companies have overwhelmingly negative reviews because most people who have a perfectly fine but forgettable experience don’t leave reviews.
What reviews can be useful for is understanding the process and ease of the claim process. Some insurers may have 24-hour help desks to answer your questions which could be a godsend if you’re in an odd timezone on the other side of the world. Others may have a handy app which makes lodging claims faster.
Related reading: What happens if you get ill on a flight?
Do I need a European Health Insurance Card?
A European Health Insurance Card (EHIC) gives you access to health care within Europe at the same rates as a local resident, allowing for reduced cost or free state-run medical care. It should be in every U.K. residents’ travel wallet, as it can save you a lot of money and hassle on holiday in Europe.
The EHIC covers medical protection only, and not other benefits of travel insurance such as flight delays and lost luggage. Even though your travel insurance may ultimately reimburse you for your overseas medical care, the EHIC will effectively treat you like a local and mean you will have less to claim back and may avoid paying an excess altogether. All U.K. residents (excluding the Channel Islands and Isle of Man) are eligible, but there are some restrictions to read about.
The card is valid for five years and each EHIC covers one person. If you have a child younger than 16, include them on your registration and you’ll receive cards for each of you. More than five million EHIC are due to expire in 2019, so it is worth checking the expiry date on yours if you already have one.
The EHIC is valid within the European Economic Areas (EEA) and Switzerland. The EHIC covers lots of politically connected areas but not necessarily physically to Europe, including Martinique and Guadeloupe as part of France, and the Balearic Islands and Canary Islands as part of Spain. However, it does not include Monaco or the Vatican, so it is worth reading here for a full list of countries.
The EHIC provides you with cover at state-run (not private) medical facilities that will treat you as a local resident, which can mean instant free treatment in some countries. In others, such as Switzerland, you’ll need to pay a portion of the cost. Pre-existing illnesses are covered but medical tourism and private health care are not.
While the U.K. has now left the European Union, your EHIC card should still work during the transition period, which runs until the end of 2020.
Events beyond your control
When the World Health Organization declared a global emergency in response to the coronavirus outbreak in China recently, airlines cancelled flights, airports began screening travellers and some countries implemented entry restrictions or quarantine procedures for potentially infected travellers. At the same time, many travellers cancelled, re-routed or postponed their travel to avoid the highest-risk regions and some were disappointed to learn that their travel insurance wouldn’t cover their trip cancellation or interruption.
Trip cancellation and interruption insurance provide reimbursement of a specified amount per person per trip for eligible travel expenses or arrangements that must be cancelled or interrupted. However, policies vary on the definition of eligible reasons for cancelling or postponing a trip and the types of expenses that can be reimbursed. Most policies won’t cover you if you simply decide not to travel — even if your decision is based on avoiding an outbreak of illness at your destination.
However, most policies do cover cancellation or interruption if you are quarantined. And, some policies cover cancellation or interruption protection if your destination is under a mandatory evacuation.
I studied policies offered by four popular travel insurance providers: AIG Travel Guard, Allianz Travel Insurance, Seven Corners and World Nomads. Each of these providers offers one or more policies with trip cancellation and interruption insurance that will cover you if you or a travelling companion is quarantined. Allianz will reimburse you if you must cancel or interrupt your trip because of a mandatory evacuation ordered by government authorities at your destination as long as you purchased your travel insurance policy prior to public knowledge of the event leading to the mandatory evacuation.
None of the policies provides reimbursement if you decide not to travel though, even if your reason is because of an epidemic at your destination. But, AIG Travel Guard and Seven Corners both offer “cancel for any reason” optional upgrades on some policies. If you purchase this upgrade, you can cancel for any reason — including deciding not to travel because of an epidemic — and be reimbursed for part of the pre-paid, forfeited, non-refundable payments or deposits for the trip.
Hopefully, you will never need to make a claim. But if you need to, it’s a good idea to understand the process when deciding on the policy, rather than waiting until you may have to make a claim. If you are at a hospital or police station, the last thing you will want to be doing is getting lost in the fine print of your policy.
Policies will usually require extensive paperwork, with receipts for all expenses, and police reports if items are lost or stolen, even if there’s zero chance of the police actually covering something. These may need to be translated into English if they are written in a foreign language, which may cause additional cost and delay.
If your provider has an app for easy claims, it’s a good idea to download it before the trip so it’s on hand for potential claims. Photograph those receipts in case you lose them on the journey home. Be patient with claims — depending on where you are in the world they can take some time to verify and payout. If you require emergency medical care, attend to this first. Some insurance providers may want to be notified of certain events before a claim is actually lodged (especially for something particularly serious or expensive), other incidents can wait until a formal claim is lodged.
You will receive a letter and/or phone call regarding the outcome of your claim once it has been assessed, advising if it has been successful (and what the payout will be), or if they require further information. If the claim is being denied, your insurance provider will notify you of the reasons for the denial, such as an exclusion that is part of your policy wording.
Related reading: What it’s like to work on a Wuhan evacuation flight
We really can’t stress this enough — do not travel without travel insurance. If you have paid for expensive policies for years and never made a claim, honestly count yourself lucky. It’s not a waste of money if it has meant you have never suffered a mishap while travelling — perhaps buy a lottery ticket with your next policy, too.
If you do have to make a claim, whether it’s something as minor as buying toiletries while you wait for delayed baggage, through to something as serious as medical evacuation, hopefully this guide means you are covered by a policy you understand and provides you with exactly what you expect and need to get yourself back to normal.
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