Check your packaged insurance T’s & C’s before travelling

19 February 2018

In the mad rush to get ready for a holiday, there’s always something you forget. Worryingly, that something is often travel insurance. According to figures from ABTA, up to a quarter of us traveled abroad uninsured last year.

That is one reason why so-called ‘packaged’ travel insurance is increasingly popular. Banks, credit card companies and even insurance companies will often offer travel insurance as an added value extra bundled in with a current account, a new card or a home insurance policy.

The great appeal to the consumer is convenience. Banks and general insurance companies tend to offer annual travel insurance as part of packaged deals, providing cover for as many trips as you like within a 12-month period. Once you get the policy, you don’t have to think about travel insurance until it comes up for renewal in 12 months’ time.

Or that’s the theory, at least.

Caught out by exemptions

The problem with these types of policy is, despite their convenience, they only provide a very generic type of cover. An October 2017 survey of such policies by insurance comparison site Compare Cover, found many had particularly low cover limits and numerous exemptions, including for the age of the holder.

The problem is, few people bother to read the T&Cs of their policies. The assumption is that travel insurance is travel insurance - whether you buy a policy directly yourself or get a packaged deal as part of a new bank account, you are covered.

This is catching lots of travellers out when they do have to make a claim. By simply trusting their package policy has them covered and not reading the small print, they can have a nasty surprise when, for example, their age or a pre-existing medical condition invalidates their cover. They might also find that the total cost of medical treatment they need while abroad is higher than their policy’s pay-out limit.

Protecting yourself

There are three things consumers can do to protect themselves. The first is to always make a point of reading the terms and conditions on any policy. Packaged travel insurance has its place in the market, and suits many travellers perfectly. But you should always check cover limits, and any exemptions to cover, so you can be sure the policy meets your requirements.

The second is to understand that different types of travel insurance are needed in different circumstances. The risk factors associated with travelling vary from trip to trip and from person to person. If you are, for example, travelling to take part in a high-risk activity like skiing or snowboarding, you need a policy that covers that greater risk. The same applies if you are aged over 50 or have a pre-existing medical condition, which in the insurance company’s mind increases the risk of you needing medical treatment while away.

Annual multi-trip insurance is great for frequent travellers who are in good health and prefer beach holidays and city breaks to anything more adventurous. But as soon as you start to add different variables into the equation, like a sport, a medical condition or even visiting lots of different places on a cruise, you need a bespoke single-trip travel insurance policy which covers those precise circumstances.

The final thing you can do is consider where you buy your insurance from. Banks and credit card companies are not insurance specialists. While they may be perfectly well-meaning in offering packaged travel insurance as an added incentive, they do not have the expertise to judge whether a generic annual plan meets your specific needs. If you are an older traveller, if you have a medical condition or if you are planning on a particular activity, look for a specialist provider who will be able to give you the correct cover or an insurance broker who will be able to advise you.

Mark Stroud is a marketing coordinator for Avanti Travel Insurance