FOOL SCHOOL
Travel Insurance Basics

August 2, 2002

Most of us have probably got quite a few insurance policies for all sorts of different things depending on our precise circumstances. The trouble is that we get everything sorted out in this country and then do something silly like take a holiday abroad and, wham, the insurance that we so carefully put together is suddenly of no use to us at all.

In fact, it's not normally quite as bad as this. Your existing UK insurance arrangements are likely to cover some things while you're abroad, but they're unlikely to be enough which is why travel insurance is worth thinking about.

So, before you do anything else, take a good look at your existing policies and see what you're already covered for. Your car insurance may already include driving abroad, for example and you may also have a degree of protection against theft if your contents insurance covers you for loss outside the home. Being insured for something twice over is a waste.

When you know what's covered already, you're in a position to shop around for a suitable travel insurance policy. The ideal policy will fill in the gaps, but it's not possible (or at least it's very expensive) to design a policy to suit your exact circumstances. The best you're going to be able to do is find the cheapest policy that covers the things that need covering.

Types of policy

Geographical area

The policy may cost more or less, depending on the risks and the costs of the place(s) that you're visiting. For instance, a policy covering Europe and the Mediterranean for 15 days might cost up to about £30. For North America this might increase to about £50.

Activities

If you're planning to do something dangerous, like skiing, then you might have to pay up to twice as much as for a typical beach holiday. And be careful about saying you're doing one thing and then doing another. Insurance isn't much good to you if, when you need it to pay out, it won't because you were in breach of the policy's terms.

Extended time periods

If you're a frequent traveller, it may also make sense to take out a policy that covers you for a whole year. If you go for this, then make sure it covers what you need it to. For instance, you can save money by not taking a policy that includes winter sports or other activity holidays. Of course, that's no good to you if adventure is your bag.

> Get a quote in the Fool's new Insurance Centre