UK Edition
Five ways to reduce the cost of travel insurance
British holidaymakers made a travel insurance claim once every minute throughout 2017, according to the Association of British Insurers (ABI).
That’s more than half a million claims, an increase of 30,000 on the previous year, resulting in payouts worth £385m. This makes 2017 the biggest year for payouts since 2010, when hundreds of thousands of travellers were left stranded after the Icelandic ash cloud disrupted flights.
Travel insurance can be a godsend when things go wrong, but no one wants to pay through the nose. Thankfully, there are many ways travellers can cut down their insurance costs and Telegraph Money has rounded up a few of the best ones below.
However, it’s important to remember not to scrimp on quality cover when searching for the best price. The cheapest policy may not provide as much protection as a costlier counterpart. Read the policy terms carefully before buying and use the Defaqto service ratings as a guide when making your final decision.
Do you need to buy travel insurance at all?
It’s possible that you may not even need travel insurance. An increasing number of financial products, usually bank accounts, come with travel insurance attached – for free or for a small extra cost. This can be a very cost-effective way of getting cover, particularly for those with a joint account who might travel together.
Some banks which offer travel cover with current accounts include Nationwide, Halifax and The Co-operative Bank, according to Moneysavingexpert.
It’s important to check exactly what your bank’s free cover will insure you for, some are not as comprehensive as other policies or could have a high excess for certain items.
Increase the excess
An easy way to cut the cost of your policy could be to increase the excess, meaning you agree to pay more yourself in the event of a claim before the insurer pays out.
This can reduce the policy cost by almost two-thirds. Telegraph Money requested quotes for a healthy 45-year-old man travelling to Australia for 10 days.
With the excess set at £0 the cheapest policy was with Starttravel.co.uk costing £21.40. Increasing the excess to £100 drastically reduced the premium with Starttravel.co.uk still coming out cheapest but now quoting £9.52. A further increase to £250 meant the cheapest cover was with Travelinsurance.co.uk at a cost of just £7.99.
Of course, setting the excess too high could make the policy useless if the cost of the claim is fairly low. As the quotes we received above show, there is little difference in cost between an excess of £100 and £250.
Avoid the travel agents
If you are buying your flights, hotels or your entire holiday from a travel agent you will often be offered insurance as part of the deal.
It is possible this might be cheaper than getting an independent quote but this is rare. It’s vital to shop around and not take what the agent tells you at face value.
Travel frequently? Get an annual policy
If you are a frequent flyer then you should consider buying an annual policy, which will usually cover you for multiple trips of up to 31 days apiece.
Quotes obtained by Telegraph Money showed it was actually cheaper for our visitor to Australia to buy an annual policy to cover him for multiple trips. Starttravel.co.uk quoted us just £7.42 for its annual policy.
Admittedly this comes with a lower level of cover than some of the policies mentioned above. However, even those in search of a more comprehensive policy can make a saving on multiple trips. ERV’s “Premier” policy costs just £12.20 for a year.
Make sure you aren’t paying for things you don’t need
While it is important to make sure the policy you choose will definitely cover everything you might need, it’s equally important to ensure you aren’t covered for bells and whistles which you do not require.
Some additional extras could make a big difference to the price of your policy premium. For example, while the cheapest quote for a man holidaying in Australia was £7.99, adding cover for winter sports pushed the premium up to £17.99 with the same policy.
Adding cruise cover would cost an additional £8 with Coverforyou.com and business trip cover an additional £2.32 with Coverwise.