Travel Insurance Basics: What Policies Usually Cover and What to Check

Travel insurance is one of those purchases many people make quickly, often at the last minute, without reading much of the policy. That is understandable: the documents are long and full of technical language. But the details matter, because the difference between a good policy and a poor one usually only becomes clear when something goes wrong.

This explainer covers the general principles. Policies vary considerably between providers and countries, so it is always worth reading the specific terms of any cover you are considering.

The Main Types of Cover

Most comprehensive travel insurance policies combine several kinds of protection in one package. The most important is usually emergency medical cover, which pays for treatment if you fall ill or are injured abroad. This can include hospital stays, doctors' fees and, in serious cases, medical repatriation to your home country. Medical costs in some destinations, particularly the United States, can be extremely high, which is why this element is often considered essential.

Other common components include:

• Cancellation cover, which reimburses non-refundable costs if you have to cancel for a reason listed in the policy.
• Curtailment cover, for when you need to cut a trip short.
• Baggage and personal belongings cover for loss, theft or damage.
• Travel delay and missed departure cover.
• Personal liability cover if you accidentally injure someone or damage property.

Some policies also offer optional add-ons, such as cover for winter sports, cruises, business equipment or particular adventure activities.

Single-Trip Versus Annual Policies

Single-trip policies cover one journey with fixed dates. Annual multi-trip policies cover any number of trips within a year, usually with a maximum length for each individual trip. For people who travel two or more times a year, an annual policy can work out cheaper and saves the effort of buying cover each time.

It is worth checking the geographical area of an annual policy. Many are priced differently depending on whether they include worldwide travel or only certain regions. Cover that excludes North America, for example, is often noticeably cheaper.

The Gaps People Often Miss

The exclusions are where many travellers run into problems. Pre-existing medical conditions are a common area of confusion. Most insurers require you to declare existing conditions, and failing to do so can invalidate a claim, even one that seems unrelated. Some conditions may be covered for an additional premium; others may be excluded entirely.

A policy is only as useful as its exclusions allow, and those are usually found in the small print rather than the headline.

Activities are another frequent gap. Standard policies often exclude higher-risk pursuits, which may include skiing, scuba diving beyond a certain depth or riding a motorcycle or scooter. Some policies cover scooter hire only if you hold an appropriate licence and wear a helmet. Alcohol-related incidents are also commonly excluded.

Cancellation cover only applies for the reasons listed in the policy. Simply changing your mind is rarely covered. Nor, in many cases, is cancelling because of a general travel advisory unless the policy specifically includes it. Buying insurance as soon as you book a trip, rather than just before departure, means cancellation cover is in place for the whole period leading up to the journey.

Finally, look at the excess, the amount you pay towards any claim yourself. A cheap policy with a high excess may offer less real value than a slightly more expensive one with a lower excess.

Cover You May Already Have

Before buying a standalone policy, check what you may already have. Some bank accounts and credit cards include travel insurance as a benefit, though the level of cover varies and may come with conditions, such as needing to pay for the trip with that card. Some home insurance policies extend to belongings taken abroad.

For residents of European countries, the European Health Insurance Card, or its UK equivalent, the Global Health Insurance Card, can provide access to state healthcare in participating countries on the same basis as local residents. These cards are useful but are not a substitute for travel insurance, as they do not cover private treatment, repatriation or non-medical losses.

Making a Claim

If you do need to claim, documentation is everything. Keep receipts, booking confirmations and any medical reports. For theft, most insurers require a police report obtained within a set time. For delays, ask the airline or rail operator for written confirmation. Contacting the insurer's emergency assistance line early, especially in medical situations, can prevent disputes about whether treatment was authorised.

A broker in Manchester who handles travel policies said the most avoidable problems she sees come from people who did not read the exclusions until after an incident. Spending twenty minutes on the policy wording before travelling is rarely exciting, but it is one of the more useful pieces of trip preparation anyone can do.