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The Snags of Travel Insurance

By: Anna Martin - Updated: 27 Feb 2017 | comments*Discuss
Travel Insurance Financial Services

Holidaymakers spend in excess of £700 million a year on Travel Insurance. A third of all Travel Insurance policies sold are done so by tour operators and travel agents, earning these companies a sizeable sum.

The sale of stand-alone Travel Insurance policies is monitored by the Financial Services Authority (FSA). This financial watchdog service operates a strict code of practice, and carefully monitors policies sold independently by insurance companies, financial advisers and brokers. Travel Insurance sold directly by a travel agent or tour operator however, is not monitored by this stringent code of practice.

Package Deal

The ease of purchasing Travel Insurance at the same place, and time, you make your holiday reservations at first appears to be an attractive option. It is worth noting that Travel Insurance sold as part of a holiday package – with flights and/or accommodation – offers a lower form of protection. This is due to the design, administration and benefits on offer. This type of instant Travel Insurance coverage will usually also have costly premiums.


Opting to purchase Travel Insurance from a reputable independent insurance provider, who is FSA regulated, can provide the holidaymaker with a more informed choice. A better level of protection is available at an affordable premium, and an independent insurance company will be able to give travellers policy options, and a personalised service instead of a discounted package deal.

The Good News

Travel Insurance premiums have been greatly reduced in recent years.

You are not obliged to purchase Travel Insurance from a travel agent or tour operator, at the time you book your holiday. You cannot be charged extra for purchasing your Travel Insurance elsewhere.

The Bad News

  • Many travellers, in particular those individuals popping overseas for a weekend or short break, still opt out of Travel Insurance coverage. Is it really worth exposing yourself to a potentially great loss, for the small price of an insurance policy that will protect you whilst you are away?
  • Less than 60 countries have reciprocal healthcare with the UK, which means you will have to expect to pay out for expensive medical treatment in many foreign destinations.
  • Many travellers also opt for the cheaper single-trip premiums offered by budget policies. A policy that costs as little as £8 for two-weeks of holiday coverage will only provide limited cover, so always make sure you familiarise yourself with the policy small print. The insurance coverage features that you most require might not be included in this discounted offer.
  • Not all Travel Insurance policies will cover you for all of the most frequent reasons you may want to make a claim for. Check your policy protection against cancellation, curtailment, medical expenses and baggage.
  • Be aware that claim settlements are based on an indemnity basis – where you are paid back a depreciated value rather than the actual cost of replacement.
  • If you fail to disclose any pre-existing medical conditions before you purchase a Travel Insurance policy your entire policy, and any potential claims you may make, will be invalidated.
  • If you are an extreme sports enthusiast make sure you purchase the relevant type of insurance coverage. A standard Travel Insurance policy may not offer the protection you require.

Worth remembering:

There is no such thing as an all-risks Travel Insurance policy.

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My 17 year-old grandaughter bought her Mum a Holiday in Venice as her Christmas gift; saving her first few months earnings to pay for it. I paid for the insurance cover. Three weeks after Christmas, my daughter was discovered to have a rare blood disorder, and despite a stem-cell transplant, unexpectedly died several weeks later. I have had a dreadfully stressful time dealing with her estate, her four devastated children, her home had to be cleared (commercial tenancy), and my husband's cancer, moved house ourselves, and claimed the cost of the holiday, some of which has now been repaid to my grandaughter. The letter I received states that two claims mean two excesses. My dead daughter cannot possibly claim, posthumously, so how can the insurance company be so mean? I am so angry for my brave grandaughter.
SnowyOwl - 27-Feb-17 @ 1:08 PM
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