Is Comprehensive Travel Insurance Really Necessary?

One of the oldest jokes around in my industry runs along the lines of “Nobody likes insurance apart from those that sell it”. However, a recent ABI report shows just how critical it can be – focusing on comprehensive travel insurance.

The Travel Reality

We can all smile at material that pokes fun at insurance. It’s a cultural tradition and even insurance professionals like me recognise that they can usually only hope to be seen as a ‘necessary evil’ – at least until a claim comes in!

Yet in the case of comprehensive travel insurance, there is a particular problem. That arises from the fact that a significant number of people think they don’t need it.

In fact, a staggering statistic from the ABI’s report indicates that over 20% of Britons travel abroad without such cover in place.

Now it’s possible to ask “so what?”. Well, that’s when it’s important to look at some of the other statistics for 2015.

Why Travel Cover Is Required

Just a sample of the key facts and figures in this report includes:

• Almost half a million policyholders claimed on their comprehensive travel insurance last year. The lesson here is clear – things DO go badly wrong on holiday sometimes.

• The insurance industry paid out an average of £1 million every day in travel claims.

• Around £128 million was paid out in holiday cancellation claims.

• The average cost of an annual travel insurance policy is £33, while the average medical treatment claim was for £1,200.

Now it’s perfectly possible to move into denial and say “this couldn’t happen to me, so I don’t need insurance”. Well, good luck with that one!

You might wish to consider, though, that 500,000 people last year, fortunately for them, didn’t agree with you and were saved huge amounts of expenditure on health treatment or cancelled holidays as a result. Are you really sure you wish to continue taking the risk?

Some Myths

There are also a few myths here that might help explain the over 20% who don’t take out cover.

They include:

• My EHIC is travel insurance and it’s free. No, it isn’t travel insurance, as you may discover if you try and use it to claim for a cancelled holiday or for medical treatment in the USA. Remember also that the EHIC will ONLY cover direct emergency medical treatment. So, if you have a broken leg and can’t manage to drive back to the UK then you’ll have to fund your own repatriation unless you have appropriate travel insurance cover.

• The government would pay my costs in an emergency. No, they won’t. The local embassy may help in exceptional circumstances but even if they do, expect to see your passport impounded and to face cost recovery proceedings once you get back to the UK. This is really not a viable option for protecting your interests when travelling abroad.

Hopefully the statistics touched on above will help to convince you that taking chances isn’t advisable.

It really would be only common-sense to find out more about comprehensive travel insurance before you set off.