Why your travel insurance could be worthless

New research shows many travel insurance policies don’t provide enough – or any – cover for things like missed flights, cancellations and lost luggage.

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Why your travel insurance could be worthless

Holidaymakers are at risk of taking out worthless travel insurance policies because they haven't checked the small print, according to new research from price comparison site comparethemarket.com.

It analysed more than 700 travel insurance products and identified many common restrictions and exclusions that would leave travellers unprotected should they need to make a claim.

Providers were found to be selling policies that don't provide enough – or any – cover for problems like missed flights, lost luggage, cancellations and the loss of expensive valuables while abroad.

Policy gaps

The research uncovered that nearly a third of single-trip policies (32%) do not cover missed connections, while 14% don't pay out for missed flights.

The website also found that nearly half (49%) of policies only covered valuables worth £250 or less. So many pricey gadgets like laptops, iPads, smartphones and cameras that holidaymakers often pack wouldn't be covered in the event of a claim.

Cover for holiday cancellations was also found to be lacking. Just under half of policies (45%) only offer cover for cancellation of prepaid travel or accommodation expenses of less than £3,000, while the cost of cancelling a family holiday outside Europe could be considerably more.

Gemma Sonfield, head of travel insurance at comparethemarket.com, said: "Travel insurance policies can result in substantial costs for those who fail to read the small print.

"Terms and conditions can be lengthy, but failure to read them means many people may assume they are covered in all instances when they are in fact not."

The website found that the average travel insurance terms and conditions document contained 26,392 words or 46 pages – the longest of any insurance product.

It would take round 88 minutes to read, which would put most people off checking the small print and noting important exclusions.

Last year, travel insurers paid out £370million in 581,000 claims of travellers who needed help when they were abroad and made a claim on their insurance policy, according to the Association of British Insurers.

What does good travel insurance look like?

If you've never had to claim for travel insurance, it can be hard to know exactly what you need to provide a good level of cover when you go away.

The Money Advice Service says a minimum level of travel insurance should include:

  • £1 million for medical expenses in Europe or £2million or more for the USA
  • £2 million or more for personal liability
  • Automatic cover for entire cost of getting you back home in a medical emergency
  • £2,000 or more for cancellation/ travel abandonment
  • £1,500 or more for baggage cover and a realistic limit for valuables and single articles
  • £500 or more for missed departure
  • £200 or more for delays like industrial action

Top tips for buying travel insurance

You should avoid buying travel insurance from your tour operator, airline or travel agent, without shopping around and comparing prices online first.

Also don't automatically go for the cheapest policy as these often have higher excesses and rigid exclusions. Make sure you get a policy that is tailored to your needs.

When looking for travel insurance you shouldn't leave it until the last minute and rushing your decision. Leaving it too late could mean you don't get cover for cancellation.

If you have a medical condition, consider using a specialist broker to find travel insurance that will provide the right level of cover.

Make sure you have an up to date European Health Insurance Card (EHIC) to avoid paying excess fees for medical treatment.

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