Travel insurance: Single trip v annual
The sun comes out over England and the UK and everyone starts to look at going on holiday.
While suntan lotion may seem more exciting than travel insurance, it is just as important. But how can you get the right cover and the best deal?
Daniel Barnes takes time off from packing his trunks and looks at travel insurance, the costs and the cover.
Hopefully the message that travel insurance is an absolute necessity is getting through - as without it the dangers are numerous and high.
Losing an iPod may be a pain, but having to pay to be flown home after a broken bone could break your finances. And more claims come from people tripping on pavements than diving off bridges, so a nice safe holiday, may not be so, well, safe.
So how do you get the best deal?
In the old days, it was a matter of just signing up with the travel agent. But nowadays as we tailor our breaks, we can tailor our travel insurance.
Annual v Single trip
It used to be annual travel insurance was just for the jet set.
For the rest of us looking at two weeks away just one travel insurance policy was necessary.
Not so now so popping away for a couple of breaks through the year becomes more common. Although, the recession is holding back some second holidays.
A single trip policy for a couple heading to Spain can cost between £20 and £30. A shorter break of a few days insured separately can come in at around £15.
Meanwhile the cheapest annual policies for Europe only covering a couple can cost around £50.
This is very much on the 'back on an envelope' calculations - and while age is not so much of a factor in the cost of travel insurance until you reach retirement - it does not account for pre-existing medical conditions etc.
It seems it could be cheaper to just buy separate policies for a long holiday and one short trip. Any longer and an annual policy would make sense.
"It depends how you look at it," says Terry Wilson, founder of Insureandgo.com.
Including the need for winter sports cover - and so an extra winter break - may also mean an annual policy might be more useful.
He warns a big problem comes as people forget about insurance when they pop away for the weekend abroad.
"People often go on long-weekends to Europe or the odd day, and they think travel insurance is not needed.
Insurance packages
Travel insurance is thrown in more often with packaged current account and even some credit cards.
But are these travel insurance policies up to the same standards as one bought directly from insurance companies?
The first step is to look at what cover you actually need.
It is generally recommended that you have cover of at least:
. Medical expenses - £2 million
. Personal liability - £1 million
. Cancellation - £3,000
. Baggage - £1,500
. Cash - £250
Your possessions may be covered by contents insurance - although you will have to check your policy - so cutting out baggage cover could lower premiums. But you have to think whether you would prefer making a claim on contents insurance or a travel insurance and what excesses there are.
A spokesperson for Abbey defended the bank's travel insurance packages, pointing out Alliance & Leicester, also part of the Santander Group, offers insurance with one account for up to 79-year-olds, while Abbey has an account with travel insurance for two adults and two children.
The Abbey Reward Bank Account offers cancellation cover up to £2,000, medical expenses up to £5 million, £1,000 for possessions and £2 million for personal liability.
Mr Wilson urges people to look carefully at the travel insurance offered by credit cards.
"Look at the small print, as credit card travel insurance pay only cover one person and not the family. And it might only cover you if you buy the whole holiday on the card."
He explains people who pay for a deposit on their credit card, but pay the balance of the holiday may find they are covered by their card's travel insurance.
"So a 'free' travel insurance can really open up a can of worms," he adds.
Travel agent and airline travel insurance
Low cost airlines for some time have tried to find more profits - beyond charging for toilets, baggage and checking in etc - through offering travel insurance.
Despite an EU ruling that they should not make buying their travel insurance as a default option on bookings, a few still do.
Just as travel agent insurance has a bad reputation for being over priced, and lacking in cover, is the same true with airline travel insurance.
A spokesperson doe Which? explains several airlines' insurance policies are failing to make the grade.
"Wizz Air's travel insurance is definitely not up to our best buy standards," she says, explaining it only provided £200,000 to cover medical expenses compared with the recommended £ 1 million.
She adds polices by BA and Ryanair also fell short.
Ryanair failed to meet the best buy criteria as cover for cancellation or curtailment only stood at £500, not the recommended £3,000.
FlyBe and Monarch's travel insurance just missed out as their policies did not cover old for new.
"The insurance offered by EasyJet did meet our best buy criteria, but we do not agree with the auto opt in," she adds.
Find the best deal for you
"Shop around, but don't just look at price," says Mr Wilson.
"Travel agents offer low cover and a high price. Aggregators offer low cover and a low price."
He highlighted one policy that offered £100 cover for lost cash, but had a £200 excess. This means only money over £200 lost could be claimed and £300 would have to be lost to claim £100.
He went on to describe the service offered by some sites as "just a sham" as people offer search for a policy and end up being sold one that doesn't cover them.
He highlights one policy covering a week in Europe for £3.50. "That includes tax, so what are you really paying for?"
"Try to speak to a broker or someone on the phone so they can talk you through the policy," Mr Wilson says.
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