What is travel insurance and why you need it

If you’re planning to get away, booking travel insurance is a must. Without it, you risk left being thousands of pounds out of pocket should something go wrong. From cancellations, lost luggage to accidents - we explain how travel insurance can protect you, why you need it and how to get the best deal.

Around 40% of holidaymakers plan to go away without travel insurance, according to GoCompare research. But recent delays and flight cancellations seen during half term are a perfect reminder of why travel insurance is an essential element of your holiday booking.

Ceri McMillan, travel insurance spokesperson for GoCompare, said: “If people are thinking they’re saving money by going away without the right level of insurance, this is most definitely a false economy. If the worst should happen and you need medical care while away, travel insurance will cover your costs. Without it, your bill could run into thousands of pounds.”

There are a whole raft of reasons why you should never go away without travel insurance. Here’s everything you need to know.

What does travel insurance cover?

Travel insurance essentially protects you from unexpected events that could be very expensive if you had to cover the cost yourself. For example, if you broke your leg in Thailand, it will cost an eye-watering £17,000 in medical costs and an air ambulance from Majorca could set you back more than £25,000, according to the Association of British Insurers. 

As well as medical costs, here’s what else you could be covered for:

• cancellation or interruptions to your holiday for reasons out of your control
• missed or delayed departure for reasons out of your control
• injury, medical evacuation and death
• lost, stolen or damaged property in your baggage
• lost or stolen passports
• accidental damage or injury

Most policies will cover these events, but always check the policy documents for exclusions. 

WHAT TYPES OF TRAVEL INSURANCE POLICIES ARE THERE

Travel insurance comes in two main forms - single trip and multi-trip:

Multi-trip travel insurance

A multi-trip travel insurance policy, also known as an annual policy, covers you for a number of trips from the date the policy starts for up to one year.

Although you will be covered for several trips throughout the year, there may be limitations such as 31 days per trip. Some providers may have a 60 day limit - so check the small print to make sure you’re covered if planning a long holiday. 

Single trip travel insurance policies

A single trip policy covers one holiday for a set period - it will end when you get back home.

A single trip is cheaper than a multi-trip one, but if you are planning a few trips within a year, an annual policy could be more cost-effective.

A single trip policy could cost as little as £5 and multi-trip from £12. We explain below what you should check for when buying a policy.

How to buy travel insurance?

The best way to buy travel insurance is by using a comparison site like GoCompare, our sister site. You can also take a look at Moneysupermarket.com or Comparethemarket.com for quotes. 

Your travel agent may offer you travel insurance, but you do not have to buy it and it may also not be the best deal for you.

You should also check if you have travel insurance via your bank or credit card; if you do, see what cover it offers and if it is enough. For example, if you are travelling with a partner, are they covered too? Or if you are going skiing, is that covered? If it isn’t, buy another policy. 

“You should also buy your travel insurance as soon as you book your holiday and not the night before you travel - that way you're protected immediately from any unforeseen circumstances even before you jet off,” Kalpana Fitzpatrick, editor of The Money Edit, said.  

Although you will want the best price for your travel insurance, it is important to get the right cover, not just the cheapest. 

• If you’re going to the United States, get extra medical cover as treatment there is notoriously expensive
• Think about what you will be doing on holiday. If you’re planning any sports or ’dangerous’ activities, get the right level of cover
• If you’re going on a cruise, backpacking or a winter sports break - make sure you get the right policy
• Declare all medical conditions or it will invalidate your policy
• Check your specific destination is covered
• Check the limits of cover - if you are taking expensive items with you (like expensive jewellery or gadgets), you may want to increase the cover limits
• If you are struggling to get a policy because of your age (65+), try the British Insurance Brokers’ Association to be connected to a specialist insurance broker
• Travel insurance will not cover you if you are travelling against Foreign Travel Advice

I have a Global Healthcare Card (GHIC) - do I still need travel insurance? 

A Global Healthcare Card (GHIC), which replaced the European Healthcare Card (EHIC) after Brexit, is free and entitles you to the same medical treatment as a local in the country you are travelling to - but it is not a substitute for travel insurance. 

It won’t cover you outside of Europe and it will not cover any costs that may be incurred in bringing you back home. And of course, it won’t cover you for non-medical unforeseen circumstances either.

Am I covered for flight delays and cancellations without travel insurance?

Under EU Regulation, passengers are entitled to compensation for delays of more than three hours or cancellations, as long they were not caused by an ‘extraordinary circumstance’ such as acts of terrorism, natural disasters and adverse weather conditions, airport security issues, and air-traffic control strikes.

Technical issues could be cited as an extraordinary circumstance, but the airline should supply proof and details of the issue when asked.

McMillan comments: “If you’re travelling with an EU-based airline, or from an airport in the EU, the airline has to help you if your flight is cancelled or delayed beyond a certain amount of time. This also means that you don’t have to claim on your travel insurance."

If it’s outside the EU, the airline doesn’t have the same duty to look after you, in which case, you will need to check with the airline to see what compensation you are entitled to.

Similarly, when it comes to travelling by sea it is your ferry company that is your first point of contact for compensation. Some ferry companies offer a 25% or 50% refund on your ticket for the part of the trip that was affected depending on the length of the journey you were going to take and the delay you experienced. 

If your ferry was cancelled, then you should be offered an alternative sailing or refund on the ticket price. ABTA ‒ what was formerly known as the Association of British Travel Agents ‒ can help if your ferry company does not respond to your compensation claim.

However, if you find you have to cancel your flight or trip, due to an illness perhaps, then travel insurance will protect you. So you should still get it. 

Travel insurance and Covid

Most travel insurance policies now have a level of cover for Covid 19 which will pay for emergency care and repatriation, as long as you are not travelling against government advice. Again, check your policy for exclusions.