Is travel insurance worth it?

Find out why travel insurance should be the first thing you pack for your next holiday.

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When you’re getting ready to jet off for an amazing holiday, insurance is probably the last thing you want to think about. And if you’ve already blown your budget booking flights, accommodation and everything else, why would you want to fork out even more money for travel insurance?

There are plenty of reasons why travel insurance is something every traveller should consider buying – the biggest of which is that you’ll probably spend a lot more out of pocket than you would on insurance if something goes wrong. Let’s take a look at some of the reasons you should consider it, and how you can find the right policy for your trip.

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Why do I need travel insurance?

There are so many reasons why travel insurance is a wise investment, including:

  • It covers overseas medical expenses.This is the biggie for most travellers. You may be able to access limited subsidised healthcare in a few spots around the world, but for the most part, you’re on your own. So if you suffer a serious illness or injury and need medical treatment overseas, you’ll need to pay for it out of your own pocket – unless you have travel insurance.
  • Those overseas medical expenses can be expensive. And when we say expensive, we mean they could potentially be life-changingly expensive. Even spending a night in a hospital bed overseas can cost almost £600 in some countries, and that’s without even thinking about things like expensive surgery or medical repatriation back home. But cover for overseas emergency medical and hospital expenses is a standard inclusion on nearly every international travel insurance policy.
  • You can access 24/7 emergency assistance. When you’re in a country on the other side of the world and you need help finding the nearest hospital or maybe an English-speaking doctor, you can phone your travel insurer’s emergency assistance line. These hotlines are available 24 hours a day, 7 days a week from anywhere in the world.
  • It covers a whole lot of other stuff too. Even budget travel insurance policies don’t just cover medical expenses, with many also covering your personal liability overseas and sometimes trip cancellation. And if you choose a comprehensive policy, you can enjoy cover for an even broader range of benefits – luggage and personal items, travel delay, rental car insurance excess and a whole lot more.
  • Accidents and unexpected events can happen at any time. Hopefully your entire trip goes swimmingly and you never need to even think about claiming on your travel insurance policy. But the fact is that no matter where you travel, accidents and unexpected mishaps can always occur. Injury and illness could strike at any time, you could crash your car, thieves could make off with your luggage, you might need to cut your trip short when a relative passes away unexpectedly – any number of unforeseen events can wreak havoc with your travel plans, so it’s important to be protected.
  • Peace of mind. Rather than worrying about what might go wrong, wouldn’t it be great if you could just sit back, relax and enjoy your holiday? Travel insurance gives you the peace of mind you need to do just that, providing a crucial financial safety net for your entire journey.

What should travel insurance cover?

By now you’re hopefully convinced that you need travel insurance. The next step is working out what you want your policy to cover.

While the type and level of protection you want is really down to personal preference, there are a few key areas you should remember to focus on:

Overseas medical expenses

Medical costs are one of the most common causes of travel insurance claims. They also usually account for the most expensive claims, as the cost of overseas hospital accommodation and treatment can be significant. And if you require medical evacuation back to the UK, the total cost could run into the hundreds of thousands.

Without travel insurance, you’d need to cover those expenses out of your own pocket. Most of us don’t have a spare hundred grand or more lying around in case of emergency, so the consequences of failing to insure could be catastrophic.

Trip cancellation and disruption

One of the key things you’ll need to do when travelling is accept that there are a myriad things that are out of your control. No matter where you are in the world, any number of unexpected events and scenarios can interrupt your trip or even force you to cancel it altogether. These reasons include severe weather, natural disasters, terrorism, the illness or death of a loved one, or a wide range of other incidents.

If your trip is interrupted or delayed, you could potentially face additional accommodation, meals and travelling expenses. If you have to cancel your trip, pre-paid deposits may be lost and many travel providers will also impose their own cancellation fees. However, these costs can be covered by your travel insurance policy. Just make sure to purchase a policy as soon as possible after booking your trip, as this means you’ll be covered for trip cancellation costs straight away.

Luggage and travel documents

If your luggage or personal items are lost, stolen or damaged overseas, not only is it incredibly inconvenient but it can also be quite expensive. For example, if your brand-new 12.9-inch iPad Pro was stolen from your bag, where would you find the money needed to replace it?

Without travel insurance, the cost of repairing or replacing those lost or damaged items would fall to you. With travel insurance, your insurer provides the necessary financial assistance to cover your expenses.

Once you have cover in place, you have the peace of mind you need to simply enjoy your holiday and not worry about hotels, airlines or thieves causing a baggage bungle. However, be warned that there’ll be no cover for theft if you leave your luggage unattended in a public place.

Extreme activities

If you’re a thrill seeker and you love nothing more than getting your adrenalin pumping while on holidays, you’ll need to make sure those activities are covered by your travel insurer. While many high-risk activities aren’t covered as standard, most policies allow you to buy additional cover for things like snow and adventure sports.

It’s also worth checking whether your insurer will cover you if you ride a motorbike or scooter. Two-wheeled transport is the easiest way to get around in some popular destinations, and the good news is that travel insurance can cover you for claims resulting from motorcycle accidents. However, you’ll need to make sure you satisfy the policy terms and conditions, such as holding a current Australian motorcycle licence or a licence valid in the country you are in.

Car rental excess

Hiring a car provides a simple and convenient way to get around while on holiday. Unfortunately, if you’re involved in an accident or if that car is stolen or maliciously damaged, you’ll be slugged with a hefty excess charge by the hire company. This amount varies between companies – it usually starts at around £500, but could be more than £2,000 in some cases.

That’s a significant amount of money to have to pay out of your own pocket, so choosing travel insurance that covers car rental excess can provide crucial financial protection for your trip.

Does travel insurance offer value for money?

To decide whether travel insurance is worth the expense, you’ll first need to figure out how much it actually costs. Of course, the premium is influenced by a wide range of factors, including:

  • Where you travel
  • The length of your trip
  • The age of travellers
  • The level of cover you choose

Is it just a rip-off? I’ve heard about claims being rejected

Most of us have heard one or more horror stories about travel insurers rejecting expensive claims, leaving unfortunate travellers stranded and significantly out of pocket. As a result, you’ve probably also heard some people label travel insurance a “rip-off” or a “waste of money”.

However, in most cases, there are very valid reasons why insurers refuse claims, and those reasons have nothing to do with ripping you off.

So, why does travel insurance have a bad reputation? There are a few factors:

  • Some people don’t understand how their policy works. Far too many people have unrealistic expectations of what their policy covers. Remember, travel insurance is there to protect you against unexpected mishaps and disasters, not against problems that could’ve easily been avoided.
  • Some people pay for cover they don’t really need. Are you fully aware of everything your policy covers? For example, are you paying for car rental excess insurance when you don’t plan on renting a car? Have you included optional snow sports cover even though you’ll just be travelling to the snow, not actually hitting the slopes?
  • Some people don’t take full advantage of the benefits available. Some travellers are unaware of the range of benefits included in their policy and so don’t take full advantage of the cover available. These might include free cover for children on family policies, car hire excess cover, 24/7 emergency assistance and cover for pet boarding costs if your return home is delayed by circumstances beyond your control.
  • Some people don’t understand that travel insurance is there as a safeguard. Travel insurance is there to protect you against a wide range of worst-case scenarios including medical emergencies, rental car accidents and stolen luggage. While it may not provide a high level of cover for smaller claims, it can make a huge difference in those situations that could potentially cost you lots of money.

With this in mind, it’s essential to read the terms and conditions to find out what your policy won’t cover, such as:

  • Claims that arise because you’re drunk or under the influence of drugs.
  • Claims caused by you breaking the law.
  • If you travel against medical advice.
  • If you cancel a trip because you change your mind.

How can I save money on travel insurance (and get value for money)?

Want to make sure your travel insurance is worth every cent? Remember the following tips:

  • Don’t buy a policy just because it’s cheap. Price will also be a consideration when choosing a policy, but it shouldn’t be the only factor you take into account. If the cost of cover sounds too good to be true, it may be exactly that.
  • Check what’s covered and the benefit limits. To determine whether a policy really offers value for money, check the table of benefits to find out what’s covered and to what limit.
  • Read the list of exclusions. Next, check the list of general exclusions to find out what’s not covered, and make sure you’re fully aware of the events and circumstances that will cause your claim to be refused.
  • Compare your options. Don’t just buy the first policy you find; shop around and compare policies from a variety of insurers to lock down the best deal.
  • Buy extra sports cover. Want to go paragliding, rock climbing or participate in any other extreme sport? Make sure your policy covers adventure activities.
  • Increase valuable item limits. Be aware of any sub-limits that apply to your luggage and personal items.
  • Take advantage of discounts. Multi-policy, loyalty and buy online discounts can cut the cost of premiums, while travel insurance coupon codes can also help you save.
  • Don’t buy from a travel agent or airline. Policies purchased from airlines and travel agents are significantly more expensive than policies purchased direct from the insurer online.
  • Consider a multi-trip policy. Buying a single-trip policy for every individual trip you take can become expensive. If you’re a frequent traveller, you can save money by purchasing annual multi-trip cover that covers all your journeys for the next 12 months.
  • Choose a higher excess. Are you discouraged from buying travel insurance by the fact that you’re paying for something you may never use? By increasing the excess payable if you should make a claim, you can enjoy a cheaper premium, meaning you’ll only take a bigger financial hit if you actually need to claim.
  • Use common sense when claiming. If you need to make a claim, get in touch with your insurer as soon as possible. Time limits apply to when you can claim, and you should also make sure to promptly provide any documentation requested by the insurer to support your claim.

Why shouldn’t I just stick with my credit card travel insurance?

While credit card travel insurance has the benefit of being free (or at least only cost you what your annual fee does), it does have its shortcomings. They include:

  • Lower benefit limits. Credit card travel insurance typically offers lower benefit limits than a standalone travel insurance policy.
  • Limited trip duration. Credit card travel insurance often has a maximum trip duration of around 90 days
  • Higher excess charges. Your excess charges are usually higher when you make a claim on credit card travel insurance.
  • Most pre-existing conditions are not usually covered. Credit card travel insurance usually excludes all pre-existing conditions from cover.
  • You must pay for the trip with your credit card. In order to activate cover, you’ll need to purchase your trip with your credit card.

Taking out a standalone policy is recommended in order to overcome the shortfalls that come with credit card travel insurance. Have a look at our detailed pros and cons of credit card vs standard travel insurance if you’re not convinced.

The final word: is travel insurance worth it?

Whichever way you look at it, buying or going without travel insurance is a gamble. If you buy cover for your trip, there’s every chance that you won’t actually have to use it. This could make travel insurance seem like an unnecessary extra expense, and the money you put towards your premium could have been better used as holiday spending money.

But what if something did go wrong on your trip? What if you crashed your rental car, had all your luggage stolen or experienced a medical emergency? Without travel insurance, those events could cost you thousands of dollars and even have life-changing financial consequences.

This is why travel insurance is such a wise investment. While it’s impossible to predict what the future holds, travel insurance gives you the peace of mind that comes with knowing you will be protected no matter what life throws at you. Start comparing policies today to make sure you’re covered for your next trip.

*Disclaimer: Please take reasonable care to answer all the questions honestly and to the best of your knowledge. If you don't answer the questions correctly, your policy may be cancelled, or your claim rejected or not fully paid.

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