How to Buy Travel Insurance

Getting the right cover at the right price will save you a lot of money and give you peace of mind.

Do you need travel insurance?

While travelling within the European Zone (including EU countries, plus Iceland, Liechtenstein and Norway), you are entitled to reciprocal state-provided health services by taking with you a form called E111, available from all Post Offices.

You must get the form stamped at the Post Office before you leave.

More details of your entitlements are available from the Department of Health website.

Remember, the level of treatment you will receive is based on what the state provides its own residents, which may not always be what you could expect in the UK. In other non-EU countries, of course, even this minimum may not apply.

There are, however, more limited reciprocal medical treatment agreements with some non-EU countries.

Meanwhile, an E111 form will not provide for immediate repatriation in the event of serious injury. Yet the cost of an air ambulance from Spain to the UK alone can be as much as £9,000.

By the way, if you require ongoing treatment for an existing condition within the EEA, you should obtain form E112 from the Department of Health.

Moreover, travel insurance is not only about health. It also covers issues such as liability to third parties, theft, loss of personal possessions, flight cancellation and so on.

So if in doubt, travel insurance is a must. The question is of what type and where to buy it from.

Travel operators or your own cover?

A staggering 80 per cent of people take out insurance offered by travel agents when they book their holiday.

Yet research shows that holidaymakers waste up to £250 million a year buying their cover this way. The Research Department (TRD), an independent organisation, last year found travel insurance cost up to twice as much when booked through an operator instead of being bought separately.

Part of the reason for this is that some travel agents use high-pressure sales techniques to ensure customers buy their insurance products.

For example, five years ago the Monopolies and Mergers Commission banned the practice of making discounted holidays conditional on taking out insurance.

But one new tactic employed by travel agents is to tell customers they will not make a holiday booking unless they have proof of insurance. However, it is completely legal to travel without insurance, although many people are unaware of the regulations.

If someone tries it on with you, explain very politely to the agent that you would like to have his or her name so that you can report them and their company to the Office of Fair Trading, which polices this type of sales activity.

One additional point to remember is that insurance sold through a travel operator is subject to insurance premium tax at 17.5 per cent. If bought through a broker or directly from an insurance company it falls to 5 per cent.

Annual or single travel policy

Most of us tend to think of travel insurance in relation to large holidays we take, possibly once or twice a year. Yet the explosion of cheap air fares means far more people travel abroad than ever before.

Hardly surprisingly, figures from the Foreign Office show that while 13 per cent of UK residents fail to take out adequate insurance in relation to all travel abroad, this rises to 43 per cent of travellers who go on short breaks.

It is just as possible to suffer an accident or a theft during a weekend in Venice, Barcelona or Prague as it is in a two-week break in Greece, Spain or France. If you are likely to be travelling abroad more than once a year, it makes sense to take out annual cover.

Which policy to buy

At this point, you're probably thinking: "Right, I know I need annual travel cover, where do I get it?"

Patience. Before you buy, here are a few more things to consider (in no particular order).

Pre-existing medical conditions: if you have one, you must inform your insurer before taking out the policy or you may not be covered when you travel abroad. When looking for cover, a simple tip is to contact the support organisation related to your medical condition: they will know who can offer insurance.
How long you will be travelling abroad. Most annual travel insurance policies won't cover you for more than 31 days at a time, so if you are planning to stay away for longer, you may need a specific policy that allows you to do that. There are several types of 'backpacker' policy available, but be aware that they cost more.

Winter sports: increasing numbers of people want to ski for a couple of weeks. Not only is it important to have a certain amount of ski cover, but if you intend to take part in certain 'intensive' winter sports (off-piste skiing or tobogganing, for example), make sure that too is covered. Also, if you are a regular skier, protection against theft of ski from roof racks, insurance against lack of snow or ski lifts being closed and so on, also matter. Specialist insurance may be necessary.

Many policies don't cover 'extreme sports', such as microlighting, mountaineering or parachuting, so always check.

Travelling separately. If you and your partner make different overseas trips, you will want protection for this. Not all policies offer this, so ask.

Cover for older people is sometimes harder to obtain. Most of the main insurers don't offer annual policies to older travellers as they tend to travel more often. And, because they're perceived to be in greater risk of needing medical help when travelling abroad, they are thought to be more likely to make claims. Some set the cut-off age as low as 65, while with others it's 75. And that includes some of the insurers which focus on the over 50s market.

While Age Concern and Help the Aged set no age limit on annual policies, RIAS (Retirement Insurance Advisory Service), Insure and Go have an age limit of 75.

An exception among the mainstream insurers is Nationwide, which will cover travellers through both its single trip and annual policies up to the age of 99.

People with HIV may be surprised to learn that they too may not be able to obtain cover. Organisations like the Terrence Higgins Trust can help find a broker offering specialist policies.

Family definitions also matter. Some annual policies, such as the one offered will cover a family of two adults and two children up to the age of 18 years. A few extend this to age 19, or even older if still in higher education. Others simply cover adults under the age of 65 plus any number of children or grandchildren under 18 in full-time education living at the same address. Mind you, by that age your children may not want to go on holiday with you anyway.

In many cases, travel insurance duplicates cover you may already have available under the terms of your home contents policy. Some insurers offer a discount of up to 10-15 per cent for excluding certain items (camcorders, portable computers) from their travel cover. Make sure you ask.

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