Travel insurance
Every year thousands of people go on holiday without insurance. True, you might not need to use it, but if you fall ill or something goes wrong you could end up paying thousands of pounds in costs.
Until a few years ago, most of us bought travel insurance from the travel agent who sold us the holiday, but today you can pick up a policy for just a few pounds via a price comparison site. However, it's worth spending a bit of time checking exactly what's included before you buy; the cheapest travel insurance may not be right for you.
Cancellation cover
If you have to cancel your holiday because you or a close family member has fallen ill, you should be able to claim back the costs of the holiday. Cancellation cover also protects you if you have to do jury service or have been made redundant.
Policies vary and some are more generous than others, but you won't generally be covered if you cancel your holiday because of an illness that you've suffered from before (or an illness that's related to the complaint you suffered from previously, which can be something of a grey area). Some policies also pay limited amounts if departure is delayed by industrial action or if the holiday has to be curtailed.
Medical Expenses
If you're travelling to a country in the EEA (which is made up of the 27 EU member countries plus Norway, Iceland and Lichtenstein) you can get cheap or free emergency medical treatment if you have an EHIC (European Health Insurance Card). Even so, you won't be covered for non-emergency treatment, accommodation costs, and expenses such as air ambulances.
The minimum amount of cover that's recommended is £2m for a trip to an EEA country and £5-10m if you're heading to the United States.
Personal Accident
Pays compensation if the policyholder is accidentally injured.
Personal Liability
Pays for any damages the policyholder may incur to another person.
Baggage and Money
Pays for up to £1,000 or more of baggage, with £250 or so for lost money.
Scheduled airline failure
If an airline goes bust, the costs of your holiday should be refunded (although not all insurance policies include this).
Annual or single trip?
If you take more than two holidays a year, you may be better off buying annual holiday insurance which will cover you, no matter how many times you go away.
