11-05-2025
Travel mistake millions of people make every year - it could cost you a fortune
Consumer rights expert Martyn James explains everything you need to know about travel insurance and why millions of people are putting themselves at risk if something goes wrong
Who doesn't love a holiday?! We save all year for a few weeks in the sun, or the chance to explore the cities and wild regions of the earth.
The Office of National Statistics found that UK citizens made over 86 million trips abroad in 2023. But a lot can go wrong on a holiday, which is why you need the best travel insurance you can buy…
…You'd think, wouldn't you? Yet according to various polls, between a quarter to half of all Brits take a punt on a holiday abroad with no insurance whatsoever. On top of that, recently found that only 4.6 million GHIC cards were issued last year, down 18%. The GHIC gets you some free hospital treatments in the European Economic Area (EEA), and some other countries too (apply here).
Terrifyingly, millions of people are going abroad without any means of support when things go wrong. The irony of this is travel insurance is very much affordable. So here's my guide on how it works, what to look for in a policy.
Single trip or annual policy?
There are two main types of travel insurance policy, though you'll find a lot of variety out there with each type. Single trip insurance does just what it says on the tin. It's often cheap and cheerful and often sold alongside travel holiday packages, flights or at airports.
Annual policies are worth it if you're taking a few holidays in a year and it's useful if you want to take advantage of those last-minute travel bargains, knowing you'll be covered. It's better for long-haul trips too and what it covers can be more extensive.
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What's cancellation cover?
If something unexpected happens in the run up to the holiday (like the death of a close relative, illness, a significant or unexpected event) then cancellation cover will pay out a sum towards the costs of not being able to travel. This clause will allow you to reclaim the cost of your holiday, though the maximum limit will be capped, so always check what that limit is.
Cheap policies can exclude cancellation cover or have very restrictive conditions, so never assume you're fully covered. Cancellation cover isn't for every eventuality either. You'll find you can only claim for incidents affecting you or your immediate family, for example.
If you've got a pre-existing medical condition that might affect your ability to travel, you'll need to disclose this when you take out the policy – or if you have an annual one, when the condition is diagnosed. If you don't do this, then your claim might get turned down.
Do I really need to read the terms and conditions?
Of all types of insurance, travel insurance is notorious for having exceptionally long terms and conditions. The good news these have reduced dramatically in recent years, but policy T&Cs that cover over 40 pages are not uncommon.
In some ways this is inevitable, as travel insurance covers you for many more scenarios than other insurance policies might. You can skim the main T&Cs if you know what to look for (see below). However, there is one thing you absolutely should read.
You should get a 'key facts' booklet that tells you the most important things in the contract, like excess levels, significant exclusions, policy limits and how to claim. These days, the insurance company might send you the key facts booklet by email. Click on the link, read it and save the document, just in case.
What is an excess fee and policy limit?
An excess fee is the amount of money that you have to pay when you make an insurance claim, except it's usually deducted from your settlement figure. A policy limit is the maximum amount your insurance policy will pay out when you claim for specific situations and losses.
Here's how it works in practice: You might have to pay the first £200 of a claim for a cancelled holiday (excess fee). In addition, the maximum policy limit could be £2,000. So if you make a successful claim for a cancelled holiday, the most you could claim for with this policy is £1,800, no matter how much you've spent on the trip.
Because there are lots of potential claims that you could make, there are lots of policy limits (or excess fees) to check when you take out your policy. You may be able to pay a little more to extend the limits or reduce the excess fees, so it's worthwhile familiarising yourself with them.
I'd suggest looking at policies that cover you for at least £2 million for medical expenses/repatriation. This sounds a lot. However, if you need treatment in America, you may find you need even more than that, depending on what has happened.
Consider £2,000 to £3,000 for cancellation, £1,500 for lost or damaged luggage and £1 million for personal liability (in case you get sued for damage you cause to you, property or other people by accident). You'll find that payouts for things like your travel cash are low, so keep your currency safe.
Am I too much of a high risk to get travel insurance?
There are a few things that can make getting insurance harder or more expensive:
Being older (over 70)
Being pregnant
Having a serious medical condition (even if it's treatable)
Going somewhere where travel is dangerous
Taking part in (legal) high-risk activities
Don't give up. There are brokers, charities and specialist insurers who can help you find cover. Get in touch if you need details of who to contact for free.
You may find making some compromises reduces the cost of insurance, depending on what you're willing to accept. If you've been treated for cancer and are in remission, an insurer may only offer you a policy that excludes medical treatment abroad in relation to cancer, but covers you for all other medical emergencies. Speak to your doctor and make a decision about whether you are willing to accept a risk like this.
Can I get a family insurance policy?
There are lots of family insurance policies to protect you and your loved ones. If you're going away with the kids, it's worth opting for one. However, if your children are going to be out of your sight while on holiday, like at a holiday club or taking part in an activity, check to ensure this is regulated and involves full supervision, which will be required by your insurance policy.
Family cover will also usually allow you to stay with a sick child in hospital or travel home with them if necessary – but often this only covers one parent. This can be distressing for parents when they discover this, but it's pretty standard in policies.
Adrenaline junkie? You'll need special cover
If you're planning on doing something wild on holiday, make sure you've added adventure sports cover – or winter sports cover - to your policy. These 'add on' policies or upgrades protect you for a wide range of activities, based on a scale of risk.
Adventure sports cover includes obvious things like bungee jumping, sky dives, quad bike riding and even horse riding. A huge number of people fall off bikes while on holiday (motor or pedal) so don't hire one without the extra cover.
Yet more sedate activates like off-trail hiking might require this additional cover too. If you're taking part in any activity on holiday with an element of risk, make sure that the service provider also has liability insurance and is trained and authorised to provide the service. You can check this on their website.
What if you need to come home early?
There are times when you might need to come home from holiday after a family event at home, or an injury abroad. This is known as 'curtailment'.
Check what your policy covers you for (replacing tickets, getting you to the airport, medical support, what happens when you're at home). If you break a limb, you might find you have to wait for a flight that can fit you on it, so keep in touch with your insurer about how they can help you.
Valuables and the cost of what's in your travel bag
It's a common assumption that you'll be covered for all your personal possessions by your travel insurance policy but this isn't the case. Most policies only have relatively limited payouts for valuables and you'll usually have to pay an extra premium if you want to cover more items when you travel.
Back in more innocent times, people would cart around a tattered paperback and some local currency on holiday. But now we have smartphones, tablet computers, gaming systems, laptops, smart watches, expensive jewelry and more. Can you afford to lose them? If not, then think carefully about what you take away with you.
Make sure you use a safe if the hotel has one – most insurance policies will require you to do this. You won't be covered if you leave items unattended. This includes in your hotel room, on a sun lounger and even in the luggage store at the hotel.
What if you need to make a claim?
I recommend photographing your insurance documents and/or saving them on a smartphone or emailing them to yourself. I'd also save your insurer's emergency telephone number in your phone too, just in case you need it in the case of a medical emergency.
No matter what the situation is that has given rise to a claim, you'll need to contact the insurance company as soon as possible after the incident has occurred. These time limits can be very tight so don't delay.
If you are a victim of a crime, you'll be required to file a police report. If you're in a hospital, then there'll be a special team on the emergency line who are there to help with medical issues. Get in touch with them and they'll talk you through your options. The hospital may want to know if you're insured before they continue treatment, especially if it is a private facility. Hold on to any documents that might be useful for the claim and send copies when you're home.
Travel safely, knowing you are covered
Despite the best efforts of Icelandic volcanoes, striking air traffic controllers, handbag snatchers and hurricanes, the vast majority of us will have a fabulous, trouble-free time on holiday. But knowing you're covered while abroad frees you up to relax and have a good time. So buy today, don't delay!
