Travel Insurance - Price vs Cover

Mar 20, 2013, 05:00 ET from

CHESTER, England, March 20, 2013 /PRNewswire/ --

  • Don't risk underinsuring your Easter getaway
  • The cheapest price doesn't always offer the best level of cover
  • Be sure to secure the best value for your travel money too, says MoneySupermarket

Families jetting off for an Easter getaway should check the levels of cover offered by their travel insurance, and not just opt for the cheapest policy available, warns

Cost versus cover

According to analysis from MoneySupermarket, those who opt for the cheapest level of cover available could be underinsuring themselves considerably. For example, a family of four can cover themselves for a fortnight's holiday to Spain for £10 from Cheaper Travel Insurance - this offers £500 worth of baggage cover. However, when you dig deeper into the policy details, you would have to pay the first £250 worth of any claim relating to baggage reducing the value of cover substantially. 

For just a small premium, the same family can secure £1,500 of baggage cover, with a much lower excess fee of £100, from an insurer such as Virgin Money, for £12.20. That same policy would also provide £3,000 of cancellation cover, and medical expenses cover of £10,000,000 compared to just £500 and £5,000,000 respectively with the cheaper policy.[1]

Bob Atkinson, travel expert, said: "A good all round travel policy is something that should be purchased as soon as you have booked your getaway, rather than it being an afterthought and bought in a rush while preparing to go away on your holiday. This is to ensure you benefit from cancellation cover for the time leading up to your trip, cover which is often forgotten about by travellers. Ensure you have comprehensive levels of cover including End Supplier Failure for those who book their own trips as opposed to going on ATOL backed packages.

"The right policy will offer good levels of cover with low excess fees. Taking a small amount of time to read the small print will ensure that you get a great travel insurance deal to match your needs.  

"As well as suitable travel insurance, travellers staying within the EEA (European Economic Area) should also make sure they have a valid European Health Insurance Card (EHIC). This gives access to state healthcare at a reduced cost, or in some instances for free. Each person travelling will need to own a card in order to be covered, however this should be used alongside an insurance policy - it's not a replacement."

Sensible savings on travel money

Shopping around for holiday currency is also something holidaymakers should plan ahead for. Research[2] from showed those who chose to buy their holiday money last minute at the airport could pay as much as 11 per cent more than using a debit or credit card designed for overseas usage. For example, travellers changing GBP to Euros via ICE bureau de change at the airport would pay £963.67 for €1,000, compared to spending €1,000 on the Norwich & Peterborough Building Society Gold Classic debit card which would cost £866.16 - a difference of £98. Travellers could also save £100.74 when using a Halifax Clarity Credit Card to take out €1,000 at an ATM, at a cost of £862.93.

MoneySupermarket found that travellers needing to collect their cash, rather than using a card abroad, would benefit from pre-ordering currency online rather than opting for a last minute airport purchase. For example, pre-ordering currency online through Moneycorp would cost £867.45 for €1,000 - a saving of up to £96.22 compared to purchasing last minute at the airport.

Bob Atkinson continued: "It comes as no surprise that travellers exchanging travel money last minute at the airport could end up paying well over the odds. However, with a small amount of pre-planning, it's simple for travellers to get more bang for their holiday buck. Using a credit or debit card designed for overseas use could be your best option. Cards such as the Halifax Clarity Card are designed for overseas use and do not incur any charges for use in shops and to pay for services, although they do charge for cash withdrawals on what is essentially a credit card. All travellers should understand any charges they may incur whilst they are away when using their credit cards. For example, most credit cards will start to charge you interest the moment you make a withdrawal from an ATM which could lead you to a hefty bill on your return, in addition to currency loading and cash withdrawal fees. Deciding ahead of your fun in the sun on the best way for you to spend money abroad will ensure that you will have extra cash in your pocket to spend whilst you are away, especially at a time when travellers are already getting less value in foreign currency due to the weakened pound."

Notes to Editors: recommends at least the following level of travel insurance cover:

  • £2m for medical expenses
  • £1m personal liability
  • £3000 cancellation - or enough to cover the total cost of your holiday
  • £1500 baggage
  • £250 for cash
  • Policy excesses under £100
  • Cover for scheduled airline failure and end supplier failure as desirable
  • Delay cover (e.g. £20/hour for first 12 hours)

[1]Travel insurance for a family of four, for a 14 night trip to Spain & Canaries (23 March - 7 April 2013)

                                         Expenses   Cancellation Baggage
                  Provider    Premium     Cover        Cover      Cover
               Cheaper Travel
               Insurance               GBP5,000,000    GBP500     GBP500
               Single Trip               (GBP250      (GBP200    (GBP250
    Best Price Standard (EUR) GBP10.13   Excess)      Excess)    Excess)

                Virgin -
    Recommended Exclusive                 GBP10,000,000 GBP3,000 GBP1,500
       Cover    Essentials                   (GBP150    (GBP100  (GBP100
      Levels    Single Trip      GBP12.20    Excess)    Excess)  Excess)
                                          GBP10,000,000 GBP3,000 GBP1,500
                Debenhams                    (GBP150    (GBP100  (GBP100
                Essential Cover  GBP12.65    Excess)    Excess)  Excess)
                Holiday Extra
                Holiday Extra             GBP5,000,000  GBP3,000 GBP1,500
                Saver                        (GBP150    (GBP150  (GBP150
                Exclusive        GBP13.00    Excess)    Excess)  Excess)

Sourced by  13.03.2013

    [2]Cost of €1,000
    Based on cost of €1,000 in Sterling
    Credit Card - Based on 5 purchases
    Provider                                                           Sterling Cost
    Clarity Card                                                           £862.93
    Sainsbury's Finance
    Gold Credit Card                                                       £862.93
    Platinum                                                               £889.98
    Sourced by: 14.03.2013 between 10am and 11am
    Credit Card - Based on 5 withdrawals
    Provider                                                            Sterling Cost
    Clarity Card                                                            £862.93
    Sainsbury's Finance
    Gold Credit Card                                                        £884.50
    Platinum                                                                £911.63
    Sourced by: 14.03.2013 between 10am and 11am
    Debit Card - Based on 5 purchases
    Provider                                                             Sterling Cost
    Norwich & Peterborough BS
    Gold Classic                                                             £866.16
    Nationwide BS
    FlexAccount                                                              £883.48
    Select Account                                                           £896.23
    Sourced by: 14.03.2013 between 10am and 11am
    Debit Card - Based on 5 withdrawals
    Provider                                                           Sterling Cost
    Norwich & Peterborough BS
    Gold Classic                                                           £866.16
    Nationwide BS
    FlexAccount                                                            £888.48
    Select Account                                                         £907.30
    Sourced by: 14.03.2013 between 10am and 11am
    Currency to collect (London Airport)
    Provider                                                             Sterling Cost
    Travelex Gatwick                                                        £877.19
    ICE Heathrow Airport                                                    £963.67
    Sourced by: 14.03.2013 between 10am and 11am
    Currency to collect (London Airport - Pre order online)
    Provider                                                              Sterling Cost
    ICE Heathrow Airport                                                    £877.19
    Travelex Gatwick                                                        £894.45
    Sourced by: 14.03.2013 between 10am and 11am
    Currency Online (for delivery)
    Provider                                                              Sterling Cost
    Moneycorp                                                               £867.45
    FairFX                                                                  £880.67
    ICE                                                                     £883.00
    ICICI Bank                                                              £883.86
    Travelex                                                                £894.85

Sourced by: 14.03.2013 between 10am and 11am compares (at 30th Jan 2013)

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