Is Travel Insurance Worth It? (2024)

Travel insurance is a prudent move if you want to protect the money you’ve paid for a holiday, and to guard against the potential financial impact of things happening to you, your travelling companions or your belongings while you’re away.

Yet according to a Forbes Advisor survey, fewer than half of people say they always take out such cover when they travel abroad (although we found that 23% have an annual travel policy).

If you’re hesitant to add another expense after shelling out for flights, hotels, car hire and excursions, not to mention food and drinks while you’re away, you might be wondering if travel insurance is worth the cost.

Travel insurance premiums have risen over the past few years as the general cost of living – and thus the cost of claims – has gone up.

According to research group Pearson Ham’s insurance index tracker, single trip travel insurance costs rose 1.2%, on average, in January this year, following a 5% rise in the final three months of 2023.

But while travel insurance can sometimes feel expensive, it can represent fantastic value if you need to make a claim.

Here we look at when travel insurance is worth it, and when it may not be necessary.

When is travel insurance worth it?

It is usually worthwhile buying travel insurance in the following circ*mstances:

• you want peace of mind you can claim reimbursem*nt if you need to cancel the holiday, for example due to a death in the family or serious illness
• you’re travelling abroad, particularly to countries and regions with notoriously expensive healthcare, such as the United States of America and the Caribbean
• your trip involves multiple destinations, flights and connections, where there is greater potential for delays and costs
• you want protection for your belongings while you’re away, including phones and gadgets, for example.

As previously mentioned, the cost of travel insurance has risen in recent years as the cost of claims has increased. The average claim was more than £970 in 2022, an increase of 33% on 2021 and the highest ever figure, according to the ABI.

The average emergency medical treatment claim was £1,750, an increase of 26% compared to 2021, and another record high.

It means that, although the initial cost of travel insurance can feel relatively high, it is likely to be good value in comparison to the potential claim costs. We found cover at around £41 to £50 for a family of four for a week in Spain, for example, using our travel insurance comparison journey.

Anne-Marie Duthie, travel insurance expert at financial data and research company Defaqto, says: “Ultimately all of us want our holidays to be the perfect break away, but unfortunately things can go wrong and depending on the circ*mstance’s involved costs can quickly escalate. But taking the time to ensure a policy is right for you could save you thousands of pounds should the worst happen.”

When is travel insurance potentially not worth it?

There are a number of scenarios when it might not be worth purchasing travel insurance. These could include:

Short breaks in the UK

Depending on the cost and duration of your domestic trip, you may not consider you need travel insurance for a staycation. But if you’ve paid a large non-refundable deposit or you’ve paid in full in advance, for example, you may want cover in case of cancellation.

Shorter trips and holidays where you can pay on arrival or cancel right up to the holiday may not require insurance.

While 99% of annual multi-trip policies will cover holidays in the UK, many impose minimum eligibility requirements for cover. For 58% of these policies the minimum stay for UK cover is a two night break, for example, while for the rest a one-night stay would be covered (more on UK holidays below).

Business travel

If your employer is booking and paying for your business trip, it is likely you won’t need your own travel insurance as your employer will probably organise this for you. But always check with the company to see what level of travel cover is included.

Bear in mind if you’re extending a business trip, for example to enjoy some time off while you’re overseas, you may need to organise a standalone travel policy for this portion of the trip.

School trips

Residential school trips, both in the UK and overseas often don’t require standalone travel insurance if the school has taken out a group policy. It’s important to seek clarification from the school about what is included and whether or not individual travel insurance or additional cover is required.

It is possible to buy standalone travel insurance for under 18s, although there are fewer insurers offering this type of cover.

If you have a family annual multi-trip policy it’s important to check the terms and conditions of the cover. While some policies may cover a child under the age of 18 when they are travelling without you, most will not, so for a school trip you may need to purchase a new single trip policy for your child.

You already have cover elsewhere

You may already have annual travel insurance as part of a packaged or premium bank account or as a perk on a premium credit card. While this may be sufficient for your needs, always check the small print of the cover you have to ensure you’re covered for each individual trip you plan to make during the year.

In some cases, the travel insurance you have as part of a financial package may have low limits and exclusions. It may not offer worldwide cover, for example, and most apply a maximum age limit, which might be 65, for example.

Also check you’ll have a generous level of medical and cancellation cover. Experts recommend this should be at least £2 million for medical cover.

For cancellation cover you’ll want to ensure you’re covered for the value of your holiday (some insurers providing packaged cover alongside another product apply a maximum limit of £1,000 for example, which may not be enough).

Baggage/gadget cover

Some home insurance policies cover your possessions, including valuables and gadgets, when you’re away from the home, and even worldwide in some cases. If you have a policy with this level of cover (cover away from the home is typically referred to as personal possessions cover), then you may not need baggage cover as part of your travel insurance.

If you can buy a travel insurance policy with baggage cover excluded this could bring down your premium and you won’t double-up on the cover.

This could also be the case if you have standalone gadget cover or worldwide insurance for your mobile phone or laptop, for example.

Check the terms of your policies to understand what is and isn’t covered and the level of the insurance provided. This way you can compare what’s on offer with a travel insurance policy and avoid paying twice for the same cover.

You paid for flights or a holiday with reward points

If you’ve paid for flights or a holiday using reward points (such as Avios, or similar) this will usually be a standard exclusion on most travel insurance policies.

Duthie at Defaqto says: “Rewards schemes costs are typically not covered under travel insurance, unless evidence of a specific monetary value can be provided. If you are paying for your holiday this way it is important to check the policy details to understand if any cover exists, or what requirements may be in place for an insurance claim to become acceptable.”

But travel insurance is likely to still be worth it in this instance to cover other risks such as a medical emergency or stolen baggage, for example. It may be possible to cut the insurance premium by excluding cancellation cover for example or opting for a policy without this specific cover (as this is the part that is unlikely to cover flights or accommodation booked with rewards points).

What does travel insurance cover?

As well as covering emergency medical bills and expenses if you need treatment while you’re abroad, travel insurance will typically offer the following:

• repatriation – covers the cost of returning home for medical reasons
• cancellation or curtailment – should you have to cancel or cut short your holiday for reasons such as illness, redundancy or bereavement, this should reimburse some of the costs. Insurers will specify the conditions under which you can make a cancellation claim
• hospital benefit – many travel policies offer a cash reimbursem*nt for expenses incurred (such as food and drinks) due to spending time in hospital while you’re on holiday. This usually pays out for each 24 hour period spent in hospital
• baggage – cover if your luggage or possessions are lost, stolen, damaged or destroyed
• personal accident – covering an accident resulting in personal injury or death
• delays –offering an inconvenience benefit up to a pre-specified amount if the booked outward or return journey is delayed for a set period of time (typically 12 hours) after checking in
• missed departures – covers the cost of emergency accommodation or travel expenses if you miss your flight, ferry or train, for example
• passports and cash – some policies offer cover for expenses incurred as a result of a lost or stolen passport, as well as cover for lost or stolen cash (subject to maximum limits)
• personal liability – cover in case of claims made against you due to accidental damage you might cause to someone else or someone else’s property.

In addition to the typical types of cover above, which will usually be included as standard, most travel policies will also offer add-on cover or specialist policies, such as:

• gadget cover – cover for expensive electrical items and gadgets, usually including smartphones, smart watches, laptops, tablets, cameras and headphones
• specialist equipment – if you need specialist equipment for use while you are away, you should be able to insure it for loss or theft. This might include skiing equipment or golf clubs, for example. For skiing you’re likely to need a specialist winter sports travel insurance policy
• cruise insurance – a policy with specific cover applicable to cruise holidays, such as cover for missed ports and cabin confinement due to illness, for example.

What doesn’t travel insurance cover?

There are a number of scenarios where you won’t be covered by standard travel insurance, including:

• if you travel to a country or region against government advice (the Foreign, Commonwealth and Development Office FCDO, publishes advice for UK tourists visiting other countries
• if you have travelled against medical advice
• if you’re travelling abroad specifically for medical treatment or a planned medical procedure, then a standard travel policy won’t cover you for any claims either directly linked to the medical procedure, plus any unrelated claims (such as a lost bag for example)
• if you’re injured as a result of taking part in dangerous or extreme sports not covered under your policy
• if something happens as a result of you being under the influence of alcohol or non-prescription drugs
• if you haven’t declared a pre-existing medical condition to the insurer
• you change your mind about the trip and want to cancel.

Does travel insurance cover airline failure?

While a handful of policies might cover you for losses on the cost of your flight if the airline goes bust, the majority don’t.

Defaqto data shows of 882 annual multi-trip policies reviewed, 88% didn’t include airline failure and 77% didn’t include end supplier failure.

It means that if you haven’t booked a package holiday (ATOL or ABTA protected, which would entitle you to an alternative or a refund in the event of an airline or company failure) you could lose all the money you’ve paid for your flight or holiday.

A few insurers will cover airline failure or end supplier failure as standard or as an optional extra, so if this is important you can seek out cover with this risk included.

Alternatively, consider paying for your holiday (flights, hotels and other costs) using a credit card. This gives you section 75 protection for purchases of more than £100 and up to £30,000, if the supplier fails. This means you could recoup your losses from your credit card provider if necessary.

Do I need travel insurance for a UK holiday?

You might assume you don’t need travel insurance for a UK holiday. Healthcare will be covered by the NHS at the nearest hospital if you fall ill unexpectedly or are injured while you’re away.

But other potential risks, such as cancellation, lost or stolen bags, belongings or cash and cover for gadgets could be worthwhile.

Check first to see what cover you might have for your personal possessions when away from the home under your home insurance policy. As mentioned above, it may not be necessary to buy a separate travel policy to cover this for trips in the UK if you already have cover.

Cancellation cover could also prove valuable, particularly if you’ve paid for a UK holiday upfront, where it may not be possible to amend or change the booking (for example should something unexpected happen and you can no longer travel).

While arguably the risks, and potential costs, are much lower for a UK break, compared to travel overseas, in some circ*mstances travel insurance could still be worth it for added peace of mind.

Is annual travel insurance worth it?

Annual multi-trip travel insurance could be worthwhile, and prove more cost effective than single trip cover, if you’re planning on taking more than one holiday in a 12-month period.

Not only is it convenient to have one policy to cover you for any trips during the year, but it could be much cheaper than buying standalone single-trip policies for each holiday you take during a year.

As with any insurance, check the fine print to ensure the annual policy you buy will cover you for all the trips (the destinations and trip durations) you plan to take. There will usually be the choice of European annual cover, worldwide cover, or worldwide cover excluding the United States of America, Canada, Mexico and the Caribbean (where healthcare costs tend to be high).

How can I keep travel insurance costs low?

Shopping around and comparing policies and premiums is a good way to find the best value cover. Don’t forget to compare cover levels and limits and any terms and conditions and exclusions. Our comparison journey can help you scour the market for the right deals to suit your needs.

Other ways to cut insurance costs are to consider stripping out all but the essential cover. Medical and repatriation cover is likely to be the most important and should always be covered as standard. But with some policies you may find you can bag a cheaper premium if you can forgo cancellation cover or cover for your baggage, for example.

Bear in mind. though. that it means you’ll be taking on the extra risk and will have to cover any expenses if something goes wrong with your holiday.

If money is tight, adjusting your trip, such as the duration, time of year and destination, can all have a bearing on the cost of the insurance. Cover to the United States, Mexico and the Caribbean, for example, tends to be more expensive, due to higher medical costs in those countries and regions.

Consider an annual multi-trip policy if you know you’ll be taking more than one overseas trip in a 12-month period. This could work out better value than taking out two single trip policies. Use our comparison journey to price up the different options and work out which solution offers the best value.