Holiday insurance pitfalls to avoid: From smartphones to stepchildren

 

Don’t get caught out by your smartphone, stepchildren or because you’re taking multiple breaks.

 

With the summer holidays fast approaching, many of us will be turning our minds to the exciting trips we’ve got planned – and, of course, the travel insurance they’ll require. According to numbers from the Foreign and Commonwealth Office, only 12 per cent of Brits read all their travel insurance documentation. Knowing what to pull out of the small print is crucial, so City A.M. has spoken to the experts to find out what you should be aware of. 

 

Aggregator websites are a great place to start to get a feel for what’s on offer, says Greg Lawson of Columbus Direct. But bear in mind that a low price policy might not cover everything you’re looking for, and there are a few things worth considering. With the excess, for example – the amount you have to pay towards any claim you make – ensure you know exactly what you’ll fork out if you make a claim. 

 

Lawson points out that, while a £200 excess on a claim potentially worth thousands might not seem like a big issue, since it’s often applied per person, per incident, it could “prove to be a high cost with a cancellation claim for a family of four”. He advises considering an excess waiver option: “you pay a bit extra so that no excess is deducted if you do have a claim.” 

 

It’s common for policies to have time limits. “If you’re lucky enough to be going on more than one trip, it’ll probably work out cheaper to take out annual cover”, says Leigh Jackson, insurance expert at MoneySavingExpert.com. An annual policy will cover you for a number of trips over a 12 month period, but you may be restricted in terms of days per holiday, he advises. It’s often 31 days, but it can be as low as 17. Expect to pay between £13 and £20 for an individual annual policy. For a family, an annual multi-trip policy could be the most cost effective and flexible option, according to MoneySuperMarket. A single policy for a family of four travelling to the US is £31.49, but worldwide annual multitrip cover would be just £44.99. 

 

For many, the summer holiday can mean time with stepchildren, or children who don’t live with you full time. Policies traditionally cover “immediate family” – though there’s not actually a set definition for what this is, says Jackson. If you do want to add members of your extended family, speak to your insurer direct. If a child lives apart from you, you may need to cover them separately. Most companies are more than happy to provide this, assures Lawson. 

 

As travelling with a number of valuable gadgets becomes the norm, the importance of checking the small print is paramount. “Most policies cover at least £1,000 of baggage per person, but check the limits for valuables and individual items”, says Lawson. A Which? investigation carried out last year found that nearly all of the 20 largest travel insurers have a single item limit for valuables on their standard policies of just £300 or less. Moreover, 15 out of 20 set the overall valuables limit at only £400. Companies “aren’t keeping pace with the times” and have “unrealistically low limits” on what people can claim back, warns Which? executive director Richard Lloyd. According to the consumer watchdog, consumers could find greater cover for their valuables when going abroad via their home insurance. Lawson recommends holiday-goers look for a policy that offers a gadget cover extension, or which specifically covers expensive items. 

 

The free European Health Insurance Card (EHIC) entitles you to treatment at the same cost as a local person within EU countries, along with Iceland, Norway, Lichtenstein and Switzerland. But it doesn’t cover private clinics or repatriation, and is not an alternative to insurance. If you do use an EHIC, it could save you money, says Lawson, as most insurers won’t apply the excess. Jackson warns, however, that some travellers have had their EHICs refused for public healthcare, so research before you go to check this hasn’t been a problem for others.