Travel insurance UK: Top tips when choosing policy, five pitfalls to avoid & how to find cheapest option

Booking a holiday can be the perfect antidote to the January blues and to escape the freezing temperatures the UK is currently facing, but travel insurance is often an afterthought. Anna-Marie Duthie, Travel Insurance Expert at Defaqto, says travellers make a lot of mistakes when it comes to travel insurance.

She has revealed the five pitfalls to avoid when choosing your next policy and top tips when choosing your travel insurance. It comes as data from Defaqto, one of the UK’s most trusted sources of financial product and market intelligence, highlights the policy details that holidaymakers need to be aware of to avoid finding themselves at financial risk. Most annual travel products include cover for cancellation as standard, but 4% only offer it as an optional add-on and 2% offer no cancellation cover at all.

Ms Duthie said: “It’s important to check that the benefit limit under the policy for cancellation/curtailment is enough to cover the cost of your holiday, as well as ensuring you are aware of which scenarios would be covered should you need to cancel.”

It's also important to consider any additional cover that may be needed for winter sports or cruise holidays. Defaqto data shows that out of over 1,100 annual travel policies, 13% provide winter sports cover as standard, 79% offer it as an option and 8% will not cover a winter sports trip at all. Consumer watchdog Which? also offers its advice to those looking to get cheap travel insurance. Listed are the top tips for choosing travel insurance, the most common mistakes people make when booking and how to get cheap insurance.

The pitfalls to avoid when booking travel insurance

• 94% of annual travel insurance products include cover for cancellation as standard, so take out your insurance as soon as you book your holiday

• Check your policy - 65% of annual products do not cover scheduled airline failure and 62% don’t cover financial failure

• Consider additional insurance needs for winter sports or cruise trips – 79% of annual travel policies offer winter sports cover as an option, 43% offer optional cover for cruise trips and 56% offer specific additional cruise benefits

• ‘Family policies’ may not cover your children if they do not live with you

• Choosing higher excesses to lower your quote can prove costly if you have to claim - 58% of annual travel insurance products apply excess amounts per person, per section

Top tips when choosing your travel insurance

• Take out your insurance when you book, to ensure you are covered should something go wrong in the lead up to your trip.

• If you can, book travel on a credit card, as this provides you some protection if the suppliers fail. Also consider if you are booking your accommodation, and travel independently check your insurance policy to ensure you will be covered if you have purchased things in this way.

• Ensure you have adequate cover if going on a winter sports or cruise holiday. Check whether activities you will undertake whilst on holiday are covered by your policy.

• If you’re choosing a ‘family policy’, check the ‘family’ definitions. If you're part of a modern family, it's quite common to have children from different parents who live apart.  Some policies define a family as "you, your partner, and your children WHO LIVE WITH YOU".  This means if you intend to take your children who live with the other parent, they would not be covered under some "family" policies. 

• Always check how the excess is applied and try to avoid opting for high excess amounts on a ‘per person, per section’ basis.

• Check any cover you may already have in place. You may have cover for your baggage under your home insurance if you have worldwide personal possessions cover. Check your bank account - if it is one you pay a monthly fee for, travel insurance may be one of the benefits provided. You may also have existing annual travel policies in place, so check that they will cover all aspects of your next trip. For example, if you weren’t originally intending to go skiing when you brought the policy but now you are.

How to find cheap travel insurance

Listed are the top tips it gives to those wanting to find cheap travel insurance.

• Use more than one comparison site if you can
• Think carefully about your requirements: Think carefully about the protection you need when applying filters. If your holiday costs £2,000, a policy with £500 cancellation cover – though probably cheaper – is unlikely to meet your needs.
• Look at more than the price: A low price doesn't necessarily mean great value, so check the cover of each deal.
• Comparison sites might not reveal your best deal: Some insurers don't sell through comparison sites, including NFU Mutual travel insurance and Direct Line, and specialist insurers. Both the government's MoneyHelper website and the British Insurance Brokers Association have directories of such insurers.
• Consider a broker: An insurance broker can find affordable cover for unusual scenarios that most insurers won't cover. The best place to find a broker is via their trade association – the British Insurance Brokers' Association (BIBA).

Which? says "comparison sites enable you to check the prices of scores of policies from dozens of insurers in the time it takes to run a single quote" and it is "a great place to start when shopping around".