When Is Travel Insurance a Rip-Off?

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What You Need to Know

  1. The Travel Insurance marketplace can be a minefield and it is easy to spend money you don’t need to. Whether or not you get ripped off though is down to you.
  2. Think about the trip you are taking and make a decision about whether insurance is actually necessary.
  3. Check to see if you already have travel insurance elsewhere. Many bank accounts or other insurance policies offer it for free.
  4. Research the medical coverage of where you are going. Sometimes it is cheaper than in the UK and cheaper to rely on it than take out costly insurance.
  5. Don’t forget your European Health Insurance Card for free state-provided health care within the EEA.
  6. Always declare any pre-existing medical conditions as this can invalidate your policy otherwise.
  7. A thorough price comparison is essential before purchasing a policy.
  8. Read the small print. The devil is in the detail. 

Overview?

Whenever we book a holiday we always find ourselves bombarded with advice about taking out travel insurance often accompanied by dire warnings of what can happen if we don’t. A glance through the pages of some our more lurid tabloid newspapers can also often uncover the latest holiday horror stories with trips gone wrong and people stranded abroad.

But the reality of the travel insurance market is that is a very broad number of companies operating, and an even wider array of policies available. But do we really need it, or are we simply pouring our money down the drain for nothing?

Many travel agents will try to sell you their travel insurance when you have booked your holiday. Sometimes it might seem easiest to just sign up there and then, and pay for everything in one go. The likelihood is that this will not be the best deal available for you, and may not even be the right deal for you. It pays to shop around.

But is travel insurance a rip off? It can be, but it doesn’t have to be. Unfortunately the onus is on the consumer to put in the leg work and ensure that they don’t wind up spending unnecessary money. In this guide, we offer a few suggestions about how to get value for money from the Travel Insurance marketplace.

Do I really need to take out travel insurance?

The first question you need to ask yourself is whether you think you really need travel insurance for your trip. To an extent this may depend on how much of a risk-taker you are. Some people are more than happy to take the risk, safe in the knowledge that 99% of the time travel insurance policies are not used.

There are various things you may want to factor into this decision including:

  • How far are you travelling
  • Are you checking in any luggage
  • Are you carrying any valuable items with you
  • Are you doing any potential dangerous activities on the trip
  • Are you staying in a previously unknown destination?

The decision is a common sense one. If you are staying in the same B&B you visit every year with your Aunty Morag in northern France and going bird watching, you can probably get away without travel insurance. If you are heading to Bali to go paragliding, then it might be worth having some sort of cover.

Am I already covered?

Many people take out travel insurance without giving any consideration to the possibility that they might already be covered.

However there are many bank accounts, credit cards, and other financial packages that offer free travel insurance when you sign up. These tend to be the accounts that charge a small monthly fee rather than the free ones, but nonetheless it is worth checking with your bank or building society, or looking at the small print to see whether you already have an insurance policy in place with them

The other place to check is with your existing insurance providers. Many home insurance, life insurance, health insurance, and sometimes even car insurance policies can offer such comprehensive coverage that they will already cover the basic requirements that you are looking for.

If you think this is the case it is still recommended that you double-check this with your insurance provider. For example some policies may not cover international travel, or travel to certain countries, while others may not offer such services as ‘emergency medical evacuation’.

Medical Insurance:

Many people first thought when travelling abroad is the need to have medical insurance in case of accident or illness. But it pays to do a little research on your destination before opening your wallet.

Certainly if you are travelling to countries like the USA where users have to pay for their medical care, and where the costs of a serious medical incident could drive you into bankruptcy, it is strongly advisable to have some sort of coverage.

But in other countries, medical care can be cheaper than it is at home. Some countries even have a thriving trade in medical tourism. If this is where you are heading then it is worth considering whether it is worth spending such money on insurance when the health care itself is so affordable.

If you are travelling in Europe, you are also entitled to free state-provided healthcare under the terms of our membership of the European Union. To claim this you will need a valid European Health Insurance Card. These are free and you can apply online. These cards will not provide any private medical care or provide any emergency cover for such services as airlifts home, but if you are not planning to take on anything too strenuous on your trip, you may well decide it is enough.

Pre-Existing Medical Conditions:

If you have any specific pre-existing medical conditions, you will also need to check the fine print of any insurance policy very carefully. Many policies will not cover certain conditions at all, and all will be invalidated if there is a pre-existing condition that has not been declared.

Declaring such conditions will impact on the price of the policy, but if you don’t do so your policy is worthless anyway, so this is a must.

For certain conditions, there are specialist policy providers on the market who offer coverage for people with these conditions. These can sometimes be more expensive than standard providers, but will offer additional services for that price. The advent of price comparison has driven down even these costs as well so it is well worth shopping around for the best deal.

Trip Cancellation Cover

If you are booking your holiday a long way in advance, it is well worth taking a look at Trip Cancellation coverage. With a lot of time between the booking and the departure who knows what may happen in your personal life, or in your work life to suddenly make all your plans fall apart.

Factors such as weather can also impact on holidays. It is worth doing some research into weather trends in the region you are heading to as it is always preferable not to be arriving for a beach holiday during the rainy season, or be touching down in the mid-west of the USA during tornado season.

If weather does impact on your travel plans it can cause you to miss connections, bookings, or at worst strand you for days at a time. Trip cancellation coverage won’t make up for the lost holiday, but it will save you a significant amount of money that you have already shelled out on the trip.

Credit Cards:

It is also always worth remembering that credit cards offer free coverage when you use them to purchase things. If you buy things on a trip that are lost or damaged, or have problems with a hotel booking on the card etc. many companies will offer refunds on those items. Check the details carefully before relying this and the rules do vary between companies.

Many credit card companies also offer insurance packages as well and these can often offer very good value. Packages can cover such items as medical care, trip cancellation, and lost luggage. They are well worth taking a look at, although of course we wouldn’t recommend buying anything without first of all doing a comprehensive price comparison.

Compare Policies:

Undertaking a thorough price comparison is standard advice for most insurance policies these days and travel insurance is no exception. At the cheaper end of the market, comparison sites might throw up some names you haven’t heard of before. It is worth doing some due-diligence on these companies before purchasing.

See what anyone who has had to make a claim through them has said online. Also check to see who is underwriting their coverage. It is not unheard of for small providers to go under, and in such circumstances it will be the company underwriting them that takes on your coverage. Most providers will be underwritten by one of the big insurance names.

To find the very best travel insurance deals today, take a look at our very own travel insurance comparison section.

Read the Small Print:

Finally, always, always, read the small print before purchasing. Every policy is different, and you must check thoroughly that the one you are buying is offering the coverage you need. You must also check that the information you have provided is accurate. If you do have to make an claim and there are errors, this might give the company reason enough not to cover you.

Travel Insurance is only a rip off, if you don’t make sure the policy you are buying is the right one for you.

Further Reading

  • If you are travelling in Europe, take a look at our guide to the European Health Insurance Card.
  • One type of travel where insurance is highly recommended is adventure travel. We have a full guide right here.
  • It is important to stay healthy on holiday, especially if you have decided against insurance, so you’d best look at our guide to Staying Healthy on Holiday
 

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