How to protect yourself financially if your holiday goes wrong.
When travelling overseas it is important to take out travel insurance. An emergency abroad can be extremely expensive. For example:
- A stomach bug/infection treated in a Californian hospital with return flights cost £100,000
- A fall resulting in a broken hip, treatment in a Spanish hospital with return flights cost £15,000
Remember: the British Embassy or High Commission will not pay for this. Your credit card accident cover, home insurance or private health cover is not always sufficient. If travelling within the European Economic Areas you will need an European Health Insurance Card (EHIC) as well as travel insurance - apply for your free EHIC
What your travel insurance policy should cover
Emergency medical cover
The main purpose of travel insurance is to cover you for the potentially high cost of medical treatment and repatriation if you are injured or fall ill abroad. This should include:
- emergency medical treatment costs, including hospital charges and ambulance fees
- returning you home following medical treatment abroad if you cannot use your original ticket
- reasonable additional transport and/or accommodation expenses for a close relative or friend to stay with you or travel from the UK to escort you if required
- temporary emergency dental treatment for the relief of immediate pain
- 24 hours assistance helplines to offer support and advice about appropriate treatment
It is important to answer any questions from your insurer about your medical history fully and honestly. Withholding details of your medical history may mean you are not fully covered.
Cover to meet your needs
In addition to ensuring you have appropriate medical cover, when choosing a policy, travellers should take some time to think about the following when buying insurance:
How often you travel
If you are planning more than one holiday in a year, consider buying an annual multi-trip policy. Single trip policies are usually more cost effective for older travellers and those with medical conditions. If you already have travel insurance as part of a bank account or credit card, check the policy terms for any age or trip limits there may be.
The length of your trip(s)
Some annual policies may include limits for the number of days of each individual trip, or a maximum number of days’ travel over the course of the year. If you are going away for a longer period, a gap year or backpacker policy may be more suitable.
Where you are going
Some annual policies only cover short haul destinations within Europe and possibly parts of North Africa. The cost of medical claims in these countries is typically cheaper which would be reflected in the premium. For those travelling further afield, make sure you buy a worldwide policy or a single trip policy for the specific destination. Most travel insurance policies will not cover you if you travel to a country where the Foreign & Commonwealth Office advises against all or all but essential travel, so make sure you check the relevant country travel advice pages for updates when booking your trip and buying insurance.
The type of holiday you plan to take
If you will be taking part in certain sports or leisure activities you may need to top-up your cover or buy a specialist policy. Winter sports and extreme sports such as bungee jumping or skydiving are not typically included in standard policies. Cruises may be excluded from some policies due to the difficulty in getting travellers to hospital for treatment. If you are going on a cruise, make sure you have appropriate cover for this.
What possessions you are taking
Check if your household contents insurance policy already covers loss of items you take away from your home. You may already have travel insurance as part of a bank account/credit card; if so these may also already provide some cover for your possessions. Check the travel insurance policy limits and excesses are appropriate for the value of possessions you are taking on holiday. If you are taking a number of high-value possessions, specialist mobile phone/gadget insurance may be more suitable as they typically provide higher cover limits.
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.
You should report any loss to the Police within 24 hours. Proof of notification will be required when you make your claim.
How many people you are travelling with
If you are travelling with others a family or group policy may be suitable. When buying insurance on behalf of others, it is important that you have access to any relevant medical details that you may be asked about. Be aware that some policies will apply an excess for each person when making a claim, so check the policy terms.
The cost of cancellation
If booking an expensive holiday in advance, you may want to ensure that you can recover the costs if you are unable to travel. Check that any cancellation cover limits meet the full cost of your holiday and look for any excesses. If your trip is cancelled or significantly delayed, you may be entitled to compensation from the airline or a refund from the travel provider. Insurance can allow you to claim unused travel and accommodation costs that you are unable to recover elsewhere. When travelling at short notice, on a low cost holiday or with a flexible ticket, you may decide that you do not need cancellation cover at all.
However, it is still important to have emergency medical cover. If your trip is dependent upon the health of a non-travelling relative, you may need to answer questions about their medical history and pay to top up the cover.
Some policies will also include or offer the following cover for you to consider:
Provides cover if you accidentally cause an injury to someone or damage their property and choose to sue you.
Personal accident cover – disability and death
Some travel insurance policies can cover a personal accident payment made for permanent disability or death.
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 possessions.
Legal expenses cover
Legal expenses cover helps you to pursue compensation or damages following personal injury while you’re abroad – is important in countries without a legal aid system.
Shop around for the best deal, but never buy a policy based on price alone - the cheapest policy may not cover all of your needs.
If you need more detailed information on travel insurance visit the Association of British Insurers (ABI) travel insurance page
If you need help finding insurance for your trip, you can contact the British Insurance Brokers’ Association
Common travel insurance policy exclusions
Most travel insurance policies exclude cover for events that happen after excessive alcohol consumption.
Some policies exclude cover for terrorist acts; if possible get a policy that doesn’t exclude terrorism.
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.