How to protect yourself financially if your holiday goes wrong.
Your credit card accident cover, home insurance, European Health Insurance Card (EHIC) or private health cover is not always sufficient. An emergency abroad can be extremely expensive. If you need to be returned to the UK it could cost you thousands of pounds, unless you are adequately insured:
- £35-45,000 - air ambulance from USA’s East coast
- £12-16,000 - air ambulance from the Canary Islands
- £15-20,000 - scheduled flight, stretcher and doctor escort from Australia (figures supplied by FirstAssist Services Ltd)
Remember: the British Embassy or High Commission will not pay for this.
What your travel insurance policy should cover
- medical and health cover for an injury or sudden illness abroad (including those arising from any pre-existing conditions)
- 24-hour emergency service and assistance
- personal liability cover in case you’re sued for causing injury or damaging property
- lost and stolen possessions cover
- cancellation and curtailment (cutting short your trip) cover
- extra cover for activities that are commonly excluded from standard policies, such as jet skiing
The policy should cover the whole time that you’re away. Multi-trip policies may specify a maximum number of days’ travel.
Your policy may also have
- personal accident cover
- legal expenses cover
- financial protection if your airline goes bankrupt before or during your trip
Many insurers will extend cover if you ask them. If not, shop around for a specialist policy.
Common travel insurance policy exclusions
- most policies will not cover drink or drug-related incidents
- where possible, ensure that your policy does not exclude terrorism
- you must take reasonable care of your possessions or your policy will not cover you
Travel insurance buying tips
- shop around to find a good price and the right product rather than opting to travel without cover
- cheaper policies will usually have less cover – for some the price seems most important, but is it worth the initial saving?
- consider annual multi-trip insurance if you make several trips a year – you’ll save time and money
- if travelling within the European Economic Area you will need an EHIC as well as travel insurance - apply for your free EHIC
Holiday cancellation and abandonment
A good insurance policy will cover you for cancelling or cutting a trip short under certain circumstances. Check carefully to see exactly what you’re covered for:
- family bereavement
- pregnancy (unknown when you buy the policy)
- jury service or witness summons
- home emergency: fire, storm or flood, burglary
- bad weather – affects the departure of flights and ships
Ensure your policy:
- will refund the full cost of your holiday
- pays out if you need to cancel or cut short a trip because you fall ill for example
- covers pre-paid expenses such as excursions
- covers extra costs incurred to get home
Types of foreign travel insurance
Personal liability insurance
If you accidentally cause an injury to someone or damage their property they may sue you. Good travel insurance will cover you for personal liability.
Personal accident cover – disability and death
Travel insurance can cover a personal accident payment made for permanent disability or death.
Cover for stolen, lost or damaged possessions
Limits for single items such as cameras and jewellery can vary from as little as £250 up to £1000 or more. Check these limits are adequate and realistic. You should report a loss to the Police within 24 hours. Proof of notification will be required when you make your claim.
All insurance policies say that you must take care of your belongings at all times. If you don’t, the policy may not pay out.
Take as much care of your property as if it were uninsured.
Lost baggage on flights
Do not rely on compensation from an airline if it loses your luggage. By law, airlines only have to pay a specified minimum value per kilo of lost luggage. This is unlikely to cover the full value of your things.
Legal expenses cover
Taking out legal expenses cover will help you to pursue compensation or damages following personal injury while you’re abroad – very important in countries without a legal aid system.
Financial protection for holidays
If your travel provider goes bankrupt when you’re abroad on holiday you need to know you won’t get stranded without a refund. Fortunately there are several associations that exist to help protect and support you – we’ve explained how below.
Book your foreign holiday through a reputable travel company
Good travel agents and tour operators will give you security through:
an Air Travel Organisers Licence (ATOL)
membership with an approved body such as ABTA; the Association of Bonded Travel Organisers Trust (ABTOT); the Association of Independent Tour Operators (AITO); Bonded Coach Holidays (BCH); or the Federation of Tour Operators (FTO)
a suitable insurance policy
a protection scheme or trust fund for any payments you make in advance
Many of the travel arrangements provided by these kinds of companies are protected in case of the financial failure of the travel company. You should, however, always ask your travel company if financial protection applies to your travel arrangements. If it doesn’t, the company may be able to offer suitable insurance to cover you.
If you have booked a ‘package’ holiday (usually a combination of transport and accommodation) in the UK then you will be protected by the Package Travel Regulations, which give consumers special protection where things go wrong or circumstances change in the period after the booking has been made.
Air Travel Organiser’s Licensing
ATOL is a consumer protection scheme for air holidays and flight, managed by the Civil Aviation Authority (CAA).
How ATOL protects you
The scheme protects you from losing money or being stranded abroad when a travel firm goes out of business.
All travel firms that sell air holidays and flights in the UK must hold an ATOL, which is only issued after a firm has met the CAA’s criteria. Licensed travel firms must also contribute to a financial protection fund managed by the Air Travel Trust (ATT). In the event of an ATOL travel firm’s failure, the CAA uses the fund to ensure people abroad are able to finish their holidays and fly home, while those unable to travel are able to receive a refund. ATOL is the only scheme for flights and air holidays sold by travel firms in the UK.
How you can get ATOL protection
When you make a holiday booking, make sure the travel firm has a licence; firms are required to display their ATOL licence number on websites and in brochures, and when you book, the ATOL holder or their agent must give you an ATOL Certificate confirming you are ATOL protected immediately when you pay any money (even a deposit) for an air holiday or flight. This should include the name of the licensed firm you’ve booked with, their ATOL number and details of what’s protected. You should take these documents with you when you travel.
You will not be protected by ATOL if you:
- just buy a scheduled flight and receive an airline ticket or other airline confirmation within 24 hours of payment
- you book direct and pay an airline direct
The ATOL website has more information about the ATOL scheme and you check whether your travel firm is licensed.
Details of how the Foreign Office can provide support to British nationals when things go wrong abroad are outlined in the publication Support for British Nationals Abroad.