This article was last updated by the author in October 2016.
A brief introduction to travel insurance.
Individuals travelling within the UK or overseas face various
risks. Some of these risks commence before the journey starts; such
as the risk of losing any monies paid if the holiday has to be
cancelled. For other risks, cover only commences once the journey
begins; such as the risk of needing medical treatment or having
some property stolen.
Two types of policy are available:
- single trip; cover must be arranged each time a trip is
- annual; cover is automatically provided for all trips
undertaken within a twelve month period (subject to a limited
number of days per trip or per year)
The majority of policies include at least the
following basic sections of cover:
Personal accident benefits
Cover is provided for capital sums following death, loss of
limbs or sight, or permanent disability caused by an accident
whilst on holiday. Some insurers also include weekly benefits for
temporary total disablement or temporary partial disablement.
Medical and associated expenses
This section includes cover for expenses reasonably incurred in
- emergency medical treatment including surgical fees, hospital
charges and emergency dental fees
- additional hotel and travelling expenses of the patient, a
friend or family member remaining with or accompanying the insured,
where advised by a doctor or medical adviser
- the additional cost of bringing home the insured person,
including the use of an air ambulance where necessary. In the event
of death abroad, the cost of bringing the body or ashes to the UK
or burial abroad is also included
- additional expenses of those in the traveller's party who are
delayed as a result of the injury or illness.
A 24-hour multilingual helpline is usually provided to give
advice, organise the necessary medical treatment and make
arrangements to bring the insured person back to this country if
Cancellation or curtailment
Cancellation cover provides for the reimbursement of deposits
and payments made for transport and accommodation booked, but not
used by the insured person. This must be due to the necessary and
unavoidable cancellation of the holiday prior to the date of
departure, as a result of causes beyond the insured person's
control (such as illness, unemployment or being called for jury
service). The possible causes may be specified in the policy or may
be limited through policy exclusions.
Curtailment cover provides for a holiday having to be cut short
part way through. It reimburses the costs of travel and
accommodation, in proportion to the amount that the insured person
has not been able to use. Like cancellation, the curtailment
of the holiday must be necessary and unavoidable.
Baggage, personal effects and money
Cover is provided for loss of or damage to:
- personal baggage including clothing and personal effects, taken
with the insured person, or purchased during the trip, or sent in
- money as defined in the policy.
Some personal effects, such as contact lenses specifically
excluded, as they are considered to be high risk.
This section covers the insured's legal liability for injury to
third parties or damage to third party property while on holiday,
including the legal costs of both the insured and the claimant.
Each section of cover is subject to a limit of liability/sum
insured and sometimes an excess.
In addition to the basic sections of policy cover, some or all
of the following extensions may be available, depending on what
each insurer has decided to include in its particular package of
cover. Some may be automatically included; others may require the
payment of an additional premium:
- Hospital cash benefit: provides for a daily benefit whilst the
insured person is confined to hospital.
- Delayed baggage: provides monies to make essential purchases of
clothing and toiletries needed as a result of baggage being delayed
for at least twelve hours.
- Travel interruption: covers the additional cost of
accommodation and travel due to the failure of public transport to
deliver the insured person to the departure point, on either the
outward or the return journey in time to travel. Some insurers may
extend cover to include delays caused by the insured's car breaking
down or being involved in an accident.
- Travel delay: covers the delay of the aircraft, ship or train
on which the insured is booked to travel for at least twelve hours,
due to strike or industrial action, adverse weather conditions or
mechanical breakdown or structural defect. A fixed benefit is paid
for each twelve hours' delay. Alternatively, the insured can cancel
the trip after twelve hours delay and cover is provided for the
resultant charges made by the tour operator or carrier.
- Pet care: a benefit is provided for each 24 hours that a cat or
dog receives in-patient veterinary treatment as a result of
suffering an injury, whilst being cared for whilst the insured is
- Hijack and mugging: provides cover where the insured is delayed
in reaching their destination as a result of the transport they are
travelling on being hijacked. Cover is also provided if the insured
receives in patient treatment following mugging.
- Loss of passport: cover is provided for the additional
travelling and accommodation costs to obtain a replacement passport
following loss or theft. Cover also includes the cost of a
temporary replacement passport.
- Legal expenses: covers the legal costs in pursuing claims for
death or bodily injury to the insured person whilst on holiday,
caused by the fault of a third party. A legal helpline is also
- Business travel: cover is extended to include travelling on
business for clerical and administrative tasks only. Liability
arising from business trips is not covered.
- Winter sports; covers the winter sport activities listed in the
policy booklet. Cover usually extends to include loss of or damage
to winter sports equipment, delays to the insured's arrival or
departure from the resort caused by an avalanche, piste closures
and accidental injury or illness during the trip, with inner limits
applying to each element of cover.
- Catastrophe or disaster cover: provides cover if the insured
cannot stay in their pre-booked and pre-paid accommodation because
of a 'disaster', such as fire, earthquake, tidal wave, avalanche,
hurricane, medical epidemic, etc. Cover includes the
necessary extra travel and accommodation expenses to allow the
insured to continue with their trip or to return to the UK if they
cannot continue with their trip.
Each section of cover is subject to a limit of liability/sum
insured and sometimes an excess.
The main exclusions which apply to travel policies include:
- taking part in hazardous activities
- participation in manual work
- travel against the medical advice or to get treatment
- travel to a country or area which the Foreign and Commonwealth
Office or World Health Organisation has advised the public not to
- pregnancy or childbirth
- self-inflicted injury, solvent abuse, alcohol and the use of
- loss of:
- luggage caused by confiscation
- baggage, personal effects and money when left unattended or
where the loss is not reported to the police within 24 hours
- contact lenses, medical and dental fittings
- camping equipment
Most insurers require the applicant to confirm they meet the
requirements of a health declaration. If these requirements are not
met some insurers will automatically decline cover. Other insurers
will refer the applicant to a confidential medical helpline, where
an underwriter will take further details of the medical condition
and will advise whether the risk is to be declined, or it is
acceptable but with special terms applied.
The premium charged is primarily based on the duration of the
visit and the country(ies) being visited. The most common limits
used by insurers are:
- the UK
- Europe, countries bordering the Mediterranean, Madeira and the
- worldwide, excluding North America, the West Indies, the
Bahamas and Bermuda;
Age may also be a rating factor, with discounts for children and
increased premiums for those over a specified age.
Additional premiums are charged if cover is needed for taking
part in hazardous pursuits.
The demand for travel insurance and the scope of cover provided
has increased in response to the worldwide expansion of air travel
and the growth in popularity of holidays abroad. Cover used to be
almost exclusively arranged by travel operators under schemes held
with specific insurers. There is now a whole range of suppliers,
including traditional intermediaries, banks, internet comparison
websites, motoring organisations, clubs and associations, as well
as insurers selling direct to the public. It is increasingly common
for travel insurance to be purchased over the internet.
Some paid-for bank accounts and credit cards offer free
'on-going' travel insurance. However, cover levels can be poor and
there may be exclusions which mean you are not covered, such as if
you may not be covered if you're over a certain age or have an
existing medical condition.
The market for travel insurance is very competitive, not only on
price, but also through a wide range of innovations to cover. Apart
from the typical cover described here, specialist policies are also
available; for example, for back packers, for those taking part in
hazardous pursuits, for those going on round the world cruises and
for those with particular medical conditions.