The true cost of cheap travel insurance

The airwaves seem to be full of annoying but admittedly brilliant advertising campaigns for cheap insurance generally involving meerkats. This is all very good for meerkats because a large proportion of the population had probably never heard of them before, but not so good for the insurance industry generally as it gives the impression that all policies are similar and the only important differentiator is price.

Price is obviously important but there are other considerations to take into account when assessing the real value for money that your travel insurance policy gives you.

How much is the excess?

Excess, the minimum amount you pay in the event of a claim, can vary greatly from one provider to another depending on the type of trip you are taking or how old you are. World First Travel Insurance for example has a flat rate applied to all policies of £60 but this is not the case with everyone. One unnamed company for example will levy an excess of £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 the two grand up front. Ouch! If you want to keep the cost down that’s fine, but make sure you have a lot of cash in your back pocket if you’re asked to pay on the spot.

Do you have enough cover?

There have been a lot of cases recently in the news of airlines going bust, strikes and disruption caused by volcanic ash. You have to be sure that you are covered for travel delay and abandonment for example or you could find yourself spending a night or two in the airport rather than in a comfortable bed.

Have you declared your medical conditions?

Do you take blood pressure pills? Well, you have a pre-existing medical condition, even if it’s under control. I only found out recently and if I had to make a claim the result of a heart attack for example, I wouldn’t have been covered if I’d withheld that information from my insurer. Being honest is always cheaper in the long run.

That’s fine as long as your policy includes insurance for pre-existing medical conditions because many won’t cover you if you have even a hint of something wrong with you. Check the small print.

Is your insurer authorised by the FSA?

In the UK, all providers of financial services, and that includes all types of insurance, are regulated and have to be authorised by the Financial Services Authority. If your cheap travel insurance provider isn’t, stay well clear.

Is it easy to claim?

This is one thing that comparison sites are good for. They all have discussion forums where people talk about their experiences with different providers. You don’t want to get a bargain price only to find out that the claims process is a nightmare and your insurer ends up settling a year later (or not).

Meerkats may be cuddly but they only show you part of the process of determining whether a policy is value for money (as are annoying pseudo opera singers with ridiculous moustaches). Take a look at the bigger picture and go to a travel insurance specialist to get real value for money.

Tags: cancellation, holiday, medical conditions, meerkats, Travel insurance, Travel Tips

This entry was posted on Wednesday, August 18th, 2010 at 1:15 pm and is filed under Travel, Travel insurance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.