As the summer holidays approach, the vexed question of travel insurance rears its head again. Should you bother? It’s an additional expense, and after all, how often do you need it?

A recent survey by the US Travel Insurance Association found that about one sixth of people had their travel plans disrupted, either by illness, natural disasters, or mechanical problems concerning their carrier. That’s quite a lot, so it could easily happen to anyone.

To insure or not to insure…

But only one fifth of those disrupted had travel insurance. That may be because many of us don’t believe that travel insurance will pay out if we need it. After all, the media is full of stories like the one about the man whose travel insurance policy with Admiral was renewed, but who was then told that he was too old to claim! But of the group affected by disruption in the UStiA survey, 85% of those who had bought insurance were satisfied with their purchase.

If the cost of your trip is low, you may decide that you can afford the cost of cancellation. But what about problems when you’re already there? You are unlikely to be covered by any other insurance. Possession of a European Health Insurance Card may reassure European travellers, but it only covers health problems and not disruption caused by carriers or natural disasters. As Sean Tipton, of ABTA, pointed out in an article for the BBC, the EHIC is a useful supplement to travel insurance, but shouldn’t replace it altogether. And although logic would suggest that if it’s the carrier’s fault, or the resort, they have to provide reimbursement, that’s not necessarily the case. Some low-cost air fares are non-refundable, as are deposits on accommodation, and others may require re-booking within a certain period. Refund policies vary widely between hotels, resorts, and other providers, and travel insurance may be important to plug a gap, or to top-up a provider’s refund. The UStiA reckons that no other single source provides the full spectrum of help of comprehensive travel insurance.

Some people are concerned that they won’t be able to get insurance that covers them, perhaps because they’ve got a pre-existing condition, or because insurance doesn’t cover illness of family members. However, many policies will cover pre-existing conditions if you buy the policy close to your booking date. Others may cover it for a small additional premium. Most travel insurance will cover trip cancellation or interruption due to unforeseen illnesses, including to family members, and repatriation costs, as well as trip cancellation or delay due to illness of a travelling companion. The detail varies between policies, so it does pay to shop around.

What you need to know

Travel insurance gives you peace of mind, for a relatively small cost compared with the total cost of your holiday. But as with all insurance, the cheapest may not necessarily be the best for you, and you need to read the small print carefully. You should read your policy in detail as soon as you buy it, to make sure that it’s right, and that there aren’t any unexpected exclusions. You can generally cancel a policy if you haven’t yet made the journey, even though there is usually a charge for doing so. Familiarity with your policy will also help if you need to make a claim, because you’ll know what you need to do. This might include reporting any loss to the police, your hotel, or your carrier, and getting an acknowledgement in writing.

You also need to be aware that some situations will not be covered. For example, you probably expect that loss of luggage will be covered. Well, yes and no. It’s likely to be covered if someone snatches it from you, or the carrier loses it. But if you leave it unattended and someone takes it, then probably not. If you leave your bag or your phone in a restaurant, or taxi, or in your hotel room, then sorry, you’re unlikely to be covered. Valuables transported in the cargo hold of a bus, train or plane often aren’t covered either, and in a car, you usually need to lock them into the boot or a lockable storage compartment.

Making a decision

Travel insurance is a difficult issue. You hope you won’t need it, because it means there’s been a problem with your holiday. But if you do need it, then you really need it! So it pays to shop around for the best policy for you, at the best price, and then read the policy carefully and make sure that you comply with its terms.