Is Holiday Insurance Worth the Cost?
Hundreds of thousands of Brits go on holiday every year. Many of us will have booked holidays to destinations such as Egypt and may not want to go any more due to the unrest that has been happening over there. If you decide not to go, your holiday insurance provider may not cover your cancellation costs – insurance providers will usually only pay out if the Foreign Office directly advises against travel to your destination. According to the Association of British Insurers, some policies still won’t pay up despite the Foreign Office announcements. It is also not against the law for your travel company to not supply you with a refund or alternate holiday destination. The whole predicament is a double-edged sword. If you decide to go to a dodgy holiday destination and get affected by any civil unrest you are likely to experience difficulty in claiming because you knew the risks before you went.
Gocompare’s travel insurance expert Caroline Lloyd says: “Most of the big insurance underwriters exclude civil unrest, commotion or rebellion.” Mike Powell, travel insurance expert at researchers Defaqto said: “The only consolation is that if you are injured in an act of terrorism, your medical bills will be covered but mainly because insurers don’t want the bad PR if they refuse.” Not much of a consolation is it? Most travellers don’t even bother with holiday insurance because they are sceptical about whether their insurer would even meet their claims (according to a recent survey). The number of people travelling uninsured is on the rise. 2011 saw figures of 1 in 5 without insurance whereas 2012 saw this rise to 1 in 4 (according to the Association of British Travel Agents (ABTA)).
Despite the lack of claim pay outs for civil unrest, there are plenty of instances where holiday insurance can be a necessity. For example, if you fell ill on holiday or were injured, the medical costs for treatment could run into the thousands. A car accident in Greece cost the victim £21,000 in medical treatment for multiple injuries (cited by one insurer on Gocompare’s panel). Another instance for travel insurance to come in handy is with lost baggage. LV states that the average Brit takes £2,500 worth of possessions with them on holiday – more than 3 times the cost of the actual holiday! However, you need to make sure that these items, such as electronics, are actually covered in your insurance plan.
James Savery, 16 July 2013