The True cost of travel insurance

25 August 2010 12:02

Holidaymakers have been hitting the headlines recently after a number of people have fallen from balconies whilst on holiday.  These accidents have resulted in people being stranded abroad and landed with massive medical bills to pay, because they failed to take out any travel insurance.

Travel insurance specialist, World First Travel Insurance is urging travellers to research travel insurance carefully and make sure they shop around to get the very best policy before they travel, to ensure they are covered should they require medical assistance whilst on holiday. They are also warning people to take reasonable care when on holiday, as any insurance clam will be void if an accident is due to over consumption of alcohol.

Managing Partner of World First, Martin Rothwell warns: “People are looking for a bargain when it comes to holidays.  We are already seeing holiday companies slashing prices, giving travellers a chance to get great holidays at a heavily discounted price and this looks set to continue.   Many people take advantage of last minute holiday deals to save money, but unfortunately some people chose to save even more money by deciding not to take out any travel insurance, which really is a false economy.

“Failing to take out any insurance is a huge risk.  Travel insurance provides cover for disruptions and delays when travelling but also for accidents, thefts and problems which may occur once on foreign shores.   I would strongly recommend people look carefully at their travel plans and consider taking out travel insurance to protect themselves.”

Consumers are spoilt for choice when it comes to choosing travel insurance.  The many comparison sites give people the choice of hundreds of providers.  Often people who do decide to take out a policy opt for a cheap option, which could be a costly choice in the long run.

There are a number of reasons for the difference in the price of travel insurance.  One of the biggest differences is the level of the excess.  Just the same as car insurance, the higher the excess, the cheaper the policy will be.

The minimum amount a traveller has to pay in the event of a claim can vary greatly from one provider to another, depending on the type of trip and the traveller’s age and medical history.  World First Travel Insurance has a flat rate applied to all policies of £60 but this is not the case with everyone.

Some companies will levy an excess of up to £2000 on all trips to North America and the Caribbean. That means that if you have an accident and need to make a claim, you’ll need to find £2000 up front.  Other insurers levy a higher excess depending on the age of the person travelling and the destination they are visiting, which makes it hard to establish the true cost of travel insurance.

There are many costs that can be incurred if you have an accident abroad, from fees for routine tests and treatment, right through to transportation in an air ambulance, which in Spain can cost up to £15,000 or £20,000 and in the region of £40,000 in the USA.  

Kate Marsh, a customer of World First, has experienced making a claim and paying an excess for medical assistance.  Kate, who was six months pregnant at the time, was taken ill whist on holiday with her family in Spain. Kate started to suffer serious stomach pains a week into her holiday and needed to seek hospital treatment

Kate said: “It was a really worrying time.  I had no idea what the level of treatment would be, where to go, if I would have to stay in hospital and of course I feared for the health of my baby. 

“I had heard horror stories about people being refused treatment unless they paid for it upfront and also people being left stranded after not being able to pay their excess.  My policy with World First had a £60 excess so I knew that would be all I had to pay no matter what treatment I needed.”

Kate spent eight hours in hospital undergoing tests.  When she was well enough to leave she paid £60, with her travel insurance covering the rest of the costs.  Had Kate not taken out travel insurance, or taken out a cheaper policy with a higher excess, she could have been faced with a bill of more than £1,000 for the treatment she received.  Her insurance with World First covered her for treatment in a private hospital, which World First felt was the best place to go for treatment under the circumstances.

A cheap policy may look like a bargain, but the devil is in the detail and extremely cheap policies, usually have high excesses or limited cover.  The excess on travel insurance can vary by anything from £60 to several thousand depending on your travel insurance provider and their pricing structure.

Some policies have different excess levels for different age groups and for visiting different destinations. And some insurers may advertise a low policy excess, but increase it for anyone who poses a higher risk and has been medically screened for pre-existing health problems

Martin Rothwell concluded:  “Some policies may indeed be cheaper when you buy the cover, but if things go wrong and you need to use your travel insurance in a medical emergency whilst abroad , to pay for treatment and get you home quickly, you need to bear in mind that you will be asked to pay the excess on the spot when receiving medical treatment.

“It seems to me to be a false economy.  Is saving £100 on the cost of your policy worth it, if it is going to end up costing you thousands of pounds in the event that you make a claim? Surly that’s the ‘true cost’ of your travel insurance.”

Travellers are reminded to buy travel insurance before they travel and read the ‘key  facts’ document and small print in any insurance they take out to make sure they are covered and fully aware of any excesses or exclusions from the policy

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