Cheap travel insurance comes at a cost

Monday, 15 May 2006 12:00

Travel insurance is now available for less than £10 for a two-week holiday, but such cheap cover can come at a high price.

A new report from market research firm Defaqto shows that cheap policies can be poor value, as they often have large gaps in what they cover.

And with average premiums at a four-year low, sacrificing cover for a few pounds could prove a false economy.

"With premiums at historically low levels there is no excuse to travel abroad without insurance," said Brian Brown, associate director at Defaqto.

"However, while these lower premiums are very welcome, consumers need to be careful that the policies do not come at the price of reduced cover. If the premium looks too good to be true, it probably is.

"Travellers should assess the level of cover they require and then shop around for it."

Mr Brown offered the following tips for travellers:

• Never travel without insurance - a few pounds saved on a policy could pale into insignificance if the worst happened and you were hospitalised without cover.
  
• Do not buy insurance from the tour operator's brochure as it will probably cost you more than you need to pay for the same cover.
  
• If premiums look too cheap, read the policy summary to be sure it covers all the features you need.
  
• Check what you have to do to claim before travelling as you will often need to get reports from the police or airlines within 24 hours of any problem occurring.
  
• Always declare any medical condition you have to your insurer.
  
• Check your premium against the averages shown in the table below. If there are marked differences, either higher or lower, investigate the reasons why.

Average cost of travel insurance policies

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