Is your travel insurance worth the paper it's written on?

Many policies 'worthless', research reveals

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Holidaymakers are being warned that their travel insurance may not cover them for some of the most common mishaps.

In 2014, insurance companies paid out £270 million to holidaymakers, according to the Association of British Insurers. However, many policies fail to cover people for some of the most common travel problems, such as medical problems, missed flights and lost luggage.

According to price comparison site comparethemarket.com, nearly a third of single-trip policies don't cover missed connections in the UK, and 14% won't pay out for missed flights.

Almost half only cover valuables up to the value of £250, meaning that common but expensive items such as iPads, laptops and phones aren't included.

Almost half of policies, the researchers found, will only pay up to £3,000 for a cancelled holiday - meaning that luxury trips and family holidays might not be covered.

Gemma Sonfield, head of travel insurance at Comparethemarket.com, says that holidaymakers often fail to read the small print.

"Many people may assume they are covered in all instances when they are in fact not," she tells the Times. "Many fall into the trap of buying insurance at the last minute."

So what should you look for when taking out holiday insurance?

Comparethemarket.com recommends a minimum of £2 million for medical expenses and £1 million personal liability. A policy should cover the full cost of cancellation, with at least £1,500 for lost baggage and £250 for lost cash.

You may want cover for scheduled airline failure and end supplier failure - companies going out of business - as well as compensation for delay, for example £20 per hour for the first 12 hours.

But it's important that you do your bit too. If you fail to mention an existing medical condition, for example, you probably won't be covered.

And it's worth noting that, contrary to what many people believe, having an European Health Insurance Card (EHIC) card doesn't give you anywhere near the same level of medical cover as a proper insurance policy.

While it does give you the right to medical treatment during your stay, you may be expected to make a contribution to the cost of that's the norm in the country you're visiting. And it won't cover the cost of repatriating you to the UK, which can cost tens of thousands of pounds.

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