The cost of travel insurance has dropped to record lows, yet one in seven holidaymakers still ventures abroad without any cover, new research reveals.
Increased competition in the travel insurance market means premiums have never been cheaper, according to a report by data provider Defaqto.
It found that single trip and annual cover for lone travellers, couples and families to Europe is now between 2.7% and 7% cheaper than last year.
For example, a single trip to Europe for a family over 17 days now has an average premium of £15.70, down 7% from 2007. And annual cover for a lone traveller to Europe is 6.7% cheaper with the average premium currently costing £49.67.
However, the cost of annual policies for trips to the US have increased slightly in the past year. Single travellers will pay the same as they did last year while couples and families will have to fork out 2.3% more.
Defaqto's Brian Brown says that while the cost of annual insurance to the US has increased since 2007, premiums are still lower than they were in 2003 even before inflation is taken into account.
“Competition in the travel insurance market is having a very significant effect on the price of travel cover”, Brown adds. “The availability of a huge number of policies, many of them online, has driven many insurers to lower their premiums. There really should be no excuse for people to travel uninsured.”
Meanwhile, the financial regulator has warned that some insurance comparison websites are supplying incorrect information to customers. Although an investigation by the Financial Services Authority (FSA) found many sites provide clear information about the policies, it says there are still outstanding issues specifically around the clarity of the levels of excess that apply.
It also questioned whether consumers are encouraged to consider features, other than price, before purchasing products.
Tips for buying travel insurance
- Shop around. Around 25% of all policies taken out are purchased direct from a tour operator or travel agent, according to the Treasury, but by using the internet to shop around for a deal you are likely to find cheaper premiums that offer a superior level of cover.
- More is less. Paying extra for annual cover could actually save you money if you plan to go away more than once a year.
- Read the small print. All travel insurance policies offer different levels of cover so make sure you check the small print to see what is included and the levels of excess before you buy. Don't be lead by price alone.
- Think ahead. If you plan to do any winter or summer sports while you are away – such as skiing or diving – then make sure you buy the appropriate insurance to cover these activities.