FOOL SCHOOL
Why You Need Travel Insurance

August 5, 2002

The most important elements of travel insurance are as follows.

Insurance for the holiday itself

You can buy insurance which will refund you the cost of a holiday if, for a variety of reasons, you have to cancel. This can also be extended to cover delays in departure. Unless the cost of the holiday would really put a dent in your finances, insuring for this sort of thing isn't very sensible. You ought to be able to "self-insure" and make sure that, if you book a holiday, then you go on it!

Personal belongings

This covers your, er, personal belongings. Generally there will be an overall limit on claims and a limit on what you can claim per item, so depending on what goes in your suitcase, you should watch out for this.

You'll also probably get cover for a certain amount of cash, but this ought to be redundant. On holiday, it's probably best not to wander around with piles of cash and if your cards get nicked, then call the card loss number (which you have with you, right?) tout de suite.

Personal accident

This is perhaps the most important area of all. It's certainly something that can potentially cost a fortune and you're unlikely to find yourself covered sufficiently by a UK medical insurance policy. You certainly want to make sure that you have full cover here and that typically means about £2 million. There's no NHS in the States, you know, and medical bills could be horrendous. And make sure you get a policy that pays for a flight home by air ambulance if necessary.

If you're travelling to an EU country, then you can take advantage of the "reciprocal health service arrangements" by completing Form E111 (available from your local post office) before you go. Completing the form might also make your health insurance cheaper but don't depend solely on Form E111. It only covers pretty basic illnesses and there are some hospitals in parts of the EU that are pretty basic too so you might want to ensure you can get home easily!

Hire cars

Be very careful about this and know exactly what you're being covered for. It's possible to end up with a third party policy (or limited cover) and, when you're driving on the wrong side of the road, fully comprehensive is surely the way to go!

Another issue is excess waiver. Basically, you will most likely stand to pay the first £1,500 or so of any damage unless you pay extra on the policy. If this £1,500 is likely to make a big difference to you, or you're driving in a particularly dangerous part of the country (and the insurer doesn't know that), then you'll want to pay the extra. Otherwise, why not take a chance? Over the years, it should work out in your favour.

Your own car

So what about if you jolly well take your own car abroad? Well it's a bit complicated, that's what.

First of all, if you're travelling to an EU country, then all UK insurance policies automatically provide at least third party insurance or the minimum cover required by the country that you're in. The same applies to a number of other countries in Europe; the thing to do is speak to your insurer about it.

When you're on the phone to the insurer, you can take the opportunity to ask for this minimum cover to be extended to the same level of cover that you have in the UK. Some insurers will even extend it for a limited period without charge.

Finally, it's also worth getting hold of a "green card" which amounts to evidence that you have the minimum insurance required by the country your visiting. At the very least, you should carry your Certificate of Insurance with you.

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