It’s more important than ever before to understand exactly what you are getting when you buy travel insurance. For a start, there are more products on the market than ever before. Everything from budget cover to deluxe comprehensive policies, special products for cruises, skiing trips, specific medical conditions, single trip or annual insurance. The list goes on.
When buying, you need to know you are getting the right type of cover for you, your family and your trip.
Then there are the ever evolving risks associated with travelling. Over the past couple of years, we all know only too well the level of disruption COVID-19 has wrought. With regards to travel, the risk of cancellations has never been higher.
Be it an unfortunately timed illness, a positive test, or even flight cancellations because of high rates of staff sickness at airlines, tens of thousands of travellers have had to make insurance claims to try to get their money back for cancelled trips. If you don’t check the cancellation terms of your travel insurance policy carefully when you buy, you might not be entitled to anything.
So how do you know if a policy is right for you or not? It all comes down to understanding what the terms and conditions mean. Here are some of the key terms to look out for.
Annual Multi-Trip Insurance
Annual travel insurance covers you for a 12 month period, rather than just for the duration of a single trip. During that 12 month period, you are insured for as many trips you want to go on (although most insurers place a cap on the total number of days you can be away for).
Annual multi-trip insurance is a great option for regular travellers as it works out cheaper than paying for individual policies for several trips.
Cancellation cover means your travel insurance will pay out for any financial losses you incur because your trip gets cancelled. This is not just restricted to the cost of flights and accommodation bookings you have already paid for. It can include things like airport parking, transfers, even COVID tests that you don’t use.
Your insurance will not pay out if you have another route to getting your money back. So, for example, under UK law, airlines must in most cases offer a refund or rebooking if they cancel a flight. Your travel insurance would not pay out if you hadn’t first tried to claim money back this way. However, as airlines can in some cases escape the need to offer refunds (such as if they cancel because of a natural disaster), it’s important to have travel insurance to fall back on.
Most travel insurance policies will now also pay out if you have to cancel because of a positive COVID test or because you or a member of your party fall ill last minute. But it’s important to read the terms and conditions carefully. Some budget policies won’t cover you if you are refused boarding because of suspected COVID symptoms, for example.
Most travel insurance will not cover you if you choose to cancel a trip yourself unless you have a good reason, such as a family bereavement. This creates a grey area if you want to cancel because of security or safety concerns, e.g. because of war, terrorist threats or rising COVID cases. Again, it’s important to read the terms carefully to understand individual policy details.
Curtailment refers to having to cut a trip short, for example because of a family emergency or because you catch COVID. Curtailment is considered a deluxe level of cover, because it will pay out for things like rebooking flights. But it has become more common to cover situations like having to isolate after testing positive for COVID-19 and having to book new flights to get home.
Emergency Medical Expenses
A medical emergency is interpreted as any situation where you fall ill or are injured and need immediate medical attention. As you usually have to pay for this abroad even in the most severe cases, travel insurance offers financial protection. Insurers stress cover for emergency medical expenses to distinguish from people seeking to claim for routine medical attention, such as buying medication over the counter.
End Supplier Failure
This refers to situations where travel firms go bust and holidaymakers are stranded abroad. In the UK, all package holidays and some flights are covered by ATOL protection, which guarantees financial assistance for things like accommodation and flights home. But travel insurance end supplier failure cover mops up those circumstances where ATOL protection isn’t available, such as small airlines going bust.
In addition to paying out for the cost of emergency medical care, some travel insurance policies offer cover for the long-term impacts of an accident or illness that happens abroad. This takes the form of a single lump sum payment and like standard personal accident insurance, is intended to compensate for the financial consequences of long term disability.
It isn’t just you or your family who could fall victim to accidents while abroad. There’s a chance that something you do could lead to an injury for another person. In this case, they might be able to sue you for the financial impact it has on them, such as medical costs, loss of earnings etc. Personal liability covers you if you are found responsible for financial losses suffered by another person while you are on holiday.
Pre-Existing Medical Condition
You will be asked to declare any pre-existing medical condition you have when you buy travel insurance. This is usually defined as any condition you have been diagnosed with and/or treated for in a specified time period, often up to two years.
The reason you have to declare this is because it changes the insurer’s risk evaluation – namely, it makes it more likely that you will need emergency medical care and therefore make a claim. An insurer might charge you more or refuse to cover you full stop. In which case you would have to look for a medical travel insurance specialist.
Single Trip Insurance
Finally, single trip travel insurance simply refers to the standard model of buying cover for the specified duration of a single trip. This contrasts to annual multi-trip insurance, which covers you for multiple trips over a 12-month period.