Matthew Wall, Wednesday November 14, 2007
No one likes to think of all the things that can go wrong when they plan a holiday - but it doesn't cost much to enjoy worry-free travel
When we're planning a holiday, none of us likes to think of all the things that can go wrong - but what if your luggage was lost or your flights cancelled? What would happen if your wallet was stolen or you needed emergency medical treatment? A good, comprehensive travel insurance policy can cover most of these eventualities and give you peace of mind.
Before you take out a dedicated travel policy, take a closer look at your home insurance. Depending on how comprehensive your policy is, any personal belongings, such as watches or cameras, may well be covered for theft or accidental damage already.
Your credit card may also provide some protection - several banks now offer free travel insurance as an incentive to use their card in preference to others. It's worth checking with your card provider as you may not need to buy an extra policy at all - but check the exact extent of the cover provided. Financial products that are bundled with other items are often not as generous as they might appear.
What to watch for
So how much cover do you need when you go abroad? One of the biggest potential costs you might face is for emergency medical treatment. Most countries don't have state-funded healthcare - so if you're not covered by medical insurance you may have to pay. And these fees can be staggeringly high.
For example, if you were unfortunate enough to suffer a heart attack in Spain, treatment could cost you in excess of £30,000. Fixing a broken hip in the US can cost more than £20,000 and even emergency dental treatment can run into thousands of pounds. The most extensive travel insurance will cover you for between £3m and £10m worth of medical expenses - but be sure to inform your insurer of any pre-existing medical conditions you may have.
If you're travelling in Europe, you're required to possess a European Health Insurance Card (EHIC) before you receive any treatment. The card is the replacement for the old E111 paper and allows EU nationals to obtain the same level of healthcare as a local resident when travelling in an EU member state.
The other potentially ruinous - if unlikely - cost you might incur overseas is for legal bills should someone sue you for any damage or injury you cause them. This eventuality is included in many travel policies under 'personal liability cover' and typically offers up to £2m worth of protection.
Strike the right balance
There are hundreds of policies on the market, all at very different prices - so how do you find the right one for your needs? Ask yourself how much it would cost you if you had to cancel your trip at the last minute - and make sure your policy covers this total. Some cheaper policies only offer a few hundred pounds in cancellation cover, others more than £5,000.
Make sure you're adequately covered for lost luggage too. If your bags were lost at the start of your holiday, you might need to buy extra clothes until they were found. And if your bags never show up, you need to consider the value of everything in them. Again, some policies are more generous than others, with typical baggage cover ranging from £500 to £3,000.
When shopping around for travel insurance, try to get a good balance between the extent of cover and the cost. And watch out for exclusions - dangerous sports, such as skiing or scuba diving, may not be covered. And if you're likely to travel abroad several times in one year, an annual policy often provides the best value for money.
