Millions of families go on holiday from the UK every year, but one in five people travel without any form of travel insurance
Consumers are savvy individual’s thanks to the internet and the ease of being able to search multiple sites, including specialist comparison websites to seek out the latest or best deals, with the opportunity to make massive savings.
Family holidays can be the biggest annual spend for families, excluding mortgages and vehicle purchases, so any savings will obviously be appreciated. However, with the average family of four spending around £4,800 on a family holiday it is staggering one in five don’t purchase travel insurance.
An annual travel insurance policy costs an average of just £33, while the average medical expenses claim for 2015 was more than £1,200, and the average cancellation claim £800. So, why do so many opt not to purchase travel insurance? It could be down to the presumptions ‘that it won’t happen to us’ or that these types of policies just don’t pay out.
Considering 494,000 individuals made a successful claim in the last twelve months against a travel insurance policy, further shows that the misconception of not needing to make a claim couldn’t be further from the truth. Every day, ABI members paid out £1 million to help cover the costs of medical treatment abroad, cancelled trips, or other travel troubles. Last year, insurers paid out a total of £365 million, equating to £1 million a day, to 494,000 individuals and families who needed help when they were abroad.
The main cost of claims was for emergency medical treatment, with insurers paying out over £196 million to cover travellers’ medical expenses and repatriation. More than 166,000 travellers claimed for medical treatment. In total, insurers also paid out £128 million to 160,000 individuals and families to cover the cost of cancelling their holiday. Insurers paid £16 million to 87,000 people to cover the cost of lost baggage and money whilst travelling.
As for the fact these policies don’t pay out is a little more complicated. Even though the ABI has published statistics showing its members paid out £1 million pounds a day in claims, it is still very important to be cautious when purchasing travel insurance. There can be significant differences between policies, specifically policy excesses and the level of coverage for items or medical bills. When it comes to travel insurance cheap policies should be avoided at all costs as they can offer little too no cover for personal items when taking into account the policy excess.
Examples I have come across include a lady who was travelling abroad and had taken out a cheap travel insurance policy. The cover for lost baggage, clothes or personal items such as mobile phones, ipads or laptops was so low that when taking into account the policy excess she wouldn’t have been able to replace anything in full if lost, stolen or damaged. In fact, it was her home and contents insurance that provided a superior level of coverage for her personal items whilst being away from home, when compared to her travel insurance policy which covered £100 for luggage or £250 for clothes. Her baggage and clothes were worth thousands of pounds, therefore making any claim pointless.
However, it is very important to have travel insurance – when it provides the right cover – because medical bills could leave you personally bankrupt or stuck in a foreign country as you are unable to afford the repatriation costs – flying you home in a private plane or specialist aircraft with the required medical team. There has been stories previously in the national press and media of cases where families or individuals have relied solely on a European Health Card (EHIC) to cover medical bills, but have not been able to raise the funds to repatriated to the UK.
The EHIC card doesn’t offer repatriation cover and only provides medical treatment whilst in a European country that is signed up to the scheme. It can cost tens of thousands of pounds to fly you home and without this coverage you will be left in a dire situation. Outside of Europe – whilst we continue to remain a member – medical bills can be terrifying. I once fell down a manhole in New York – don’t ask!! – whilst crossing a road and broke my foot. The bills which I received a copy of were thousands of dollars, with one specialist charging $1,500 for just speaking to me. Luckily my claim was reasonably small, but in the USA medical bills can quickly spiral out of control so ensuring your policy doesn’t have a low cap is very important.
In one repatriation case I was informed about a policyholder who received excellent medical care whilst abroad after suffering a terrible accident. The insurer who was picking up the cost of the medical treatment quickly decided to fly him and his wife back to the UK on a private jet which was met by an ambulance which then proceeded to take them to an NHS hospital. The reason I was given for this quick approval of repatriation was the spiralling medical bills in the foreign country and it was cheaper to fly them back and get them into a “free” hospital than to remain in a private hospital abroad.
Mark Shepherd, Manager for General Insurance at the ABI said: “Holidays are meant to be enjoyable and relaxing, but they can be traumatic for some travellers who become ill or are injured abroad.
“Medical treatment in foreign countries can cost tens of thousands, which is why it’s essential to have a travel insurance policy that will cover you, should you need it. Travel insurers pay £1 million a day for cancelled trips or to cover medical costs and offer support during an emergency abroad.
“There are a wide range of policies available, so it’s important to shop around to find a policy that meets your needs, and be aware that a cheap policy is not right for everyone.”
ABI Top 6 tips to buying travel insurance
- Shop around – Travel insurance policies vary to suit different needs so it’s essential to shop around, and know that the cheapest policy may not cover all that you need.
- Get an EHIC – Make sure you have a valid European Health Insurance Card (EHIC) when travelling in Europe. It’s not a substitute for travel insurance, but is free and gives access to state-provided healthcare on the same basis as a resident.
- Take care – Holidays should be fun and relaxing, but take care and act responsibly. Generally, travel insurance policies will not cover accidents if someone has not taken reasonable care or had excessive amounts of alcohol.
- Check FCO advice – Check the Foreign and Commonwealth Office travel advice and information pages for your destination before you travel.
- Declare medical conditions – Tell your insurer about any medical conditions when you take out a travel insurance policy.
- Call your insurer – Make sure you take note of your insurer’s emergency phone number. If something happens when you’re on holiday and you need to make a claim, call your insurer first who can help.