Will your travel insurance actually cover you this summer?

Kat Cereda: With summer just around the corner and a lot of uncertainty going on in the world, travel insurance feels more relevant than ever. The problem is that most of us don't really know what we've bought until we need it. Let's find out on this episode of Which? Money.

Hiya, it's Kat in the Which? studio and I'm joined today by Dean Sobers. Today we're going to be talking about travel insurance, which is probably the most boring part of booking a holiday. But get it wrong and it can be the most costly. Luckily, Dean and I are here to dive right in, so stick with us. Hi, Dean.

Dean Sobers: Hiya.

Kat Cereda: Most people probably buy travel insurance quite quickly online without really reading much of it and just trust and hope that it will be fine. How much of a mistake is that?

Dean Sobers: We did a survey a couple of years ago of people that had all types of insurance and 64% – so two thirds – thought that most insurance products available on the market offer similar levels of protection. About a third of people – three in ten – think insurance will cover them for anything that's not their fault.

Both of those assumptions can mean you end up getting an insurance product that is completely out of step with what you need it to do, and that you can have a false idea that you've got more financial protection than you actually do.

What we find with travel insurance specifically is that compared to lots of other types of insurance, it has a comparatively low claims acceptance rate. Travel insurance policies tend to accept about eight in ten claims according to the latest statistics from the regulator. That sounds quite high, but then if you compare it to most of the other types of insurance products, it's about 90% or more. With car insurance, 99% of claims are accepted, so there's a big difference.

Kat Cereda: It's comparatively quite low.

Dean Sobers: It's comparatively quite low. One of the reasons is that it's this hugely complicated product. It can be covering you if you have a medical crisis or you might need to use it because you've lost your iPad or something. There's this huge range of scenarios in which you might reach for it. It becomes quite difficult to check everything that's within it to make sure that you're sufficiently covered in all those different areas.

Kat Cereda: People just hear travel insurance and they'll assume all of it's offering the same thing, it's just a case of getting the best deal.

Dean Sobers: I think that's exactly it. People just kind of assume that I need travel insurance in case something goes wrong in my holiday – what's the cheapest deal? Okay, I'll get that. Also, when you're buying it, you're tending to think about far more interesting things like the logistics of your holiday and what you're going to do there.

Kat Cereda: Exactly. Going off that – and we'll dive into the finer details in a bit – I'm sure a real point of concern right now is a lot of global uncertainty going on, specifically with the ongoing situation in the Middle East. People who have holidays coming up might be worried about cancellations or what happens if the Foreign Office advises against travelling to a location. Are you then covered? Is your travel insurance then void? Can you talk me through that?

Dean Sobers: Unfortunately, the top line is travel insurance isn't usually that helpful with that particular scenario. When we did our last piece of analysis, we looked into whether you would be covered if you needed to cancel your holiday because the FCDO – the Foreign Office – gave advice that your destination was unsafe to travel to.

If you chose to go there, with the vast majority of travel insurance policies you'd be invalidating the policy because you'd be travelling against government advice. But all but 13% of policies that we looked into have a war exclusion when it comes to cancellation claims. The vast majority of policies don't cover you for cancelling because of war or for any other claim that's related to war.

Kat Cereda: And what if you've already booked your holiday and you've already got this insurance? Can anything else change due to these kind of events going on?

Dean Sobers: There's a huge amount of variation between policies. What we do when we look at insurance policies is we do this big survey of insurance products and we rate them in various areas. This year we looked at 120 different areas of cover and we looked at how good they were compared to other policies in all these different areas. We ended up with what's called a policy score, which is a percentage score.

The percentage scores in the last analysis ranged between 82% at the top and 21% down at the bottom. The reason I say that is just to demonstrate how wide the differences are between policies in terms of their cover, and also all the different areas in which they can have differences.

Kat Cereda: When people are generally reading through a policy or they're comparing different policies on the market, what should they be looking at beyond the headline number? Why does it matter to go beyond just the headline figure of a travel insurance policy?

Dean Sobers: The price is really important. You've got a budget; you can't spend an infinite amount to get the best cover available. It's not to be dismissed, but the other side of the coin is what you're going to get for what you spend.

The information about that is laid out in the policy wording. You'll usually get two documents with your travel insurance: one is a summary document called the Insurance Product Information Document or IPID, and then there's a more hefty tome which is the policy wording. If an insurer is going to reject your claim, the reason why will be in that larger document.

Kat Cereda: The one that you don't want to read.

Dean Sobers: The bit that you won't want to read. Realistically, I can recommend that people just read these things cover to cover, but that's probably not going to happen. What I tend to suggest is that you kind of make a list about what you want to be covered in your travel insurance and also what you expect to be covered. Then hunt through the policy wordings just to see if you can find them specifically dealt with. If it's not there, it's probably not covered.

Most policy wordings are written in what's called a specified risks or specified perils format. And what that means is that if it's not written down in it, it's not covered; it's automatically excluded. So what that kind of means is that you don't just have to look for things that are there; you have to also look for things that are not there, which is really difficult to do.

Kat Cereda: Because you don't know what you're going to need.

Dean Sobers: You're not going to be able to predict everything that's going to happen. It's easier to see things that are there than to kind of see what's missing, but that's unfortunately the way you kind of have to engage with the wording to understand it properly.

Kat Cereda: Are there things that sound like they obviously should be included but actually in most cases they aren't?

Dean Sobers: I do assume that lots of people would assume that things like war would be covered. And along with that, lots of other catastrophic events which can affect lots of people at the same time and make travel a nightmare or make it impossible. So this can be things like infectious diseases, pandemics, civil unrest, terrorism, things like that.

And what we find whenever we look is that lots of policies won't cover these things. Usually where you'll find out about that is in a section of the policy called the general exclusions which details exclusions that apply to all of the policy. So you might look in the cancellation section or the medical section and you won't see it noted there as an exclusion, so you might assume it's just covered. But you have to double check and cross-reference with these general exclusions because they might be affecting what you think is covered.

Kat Cereda: So what about money and driver's licenses? Don't they have a part to play in this as well?

Dean Sobers: Yeah, I think they do, and they kind of speak to a larger issue that certain words that you might assume have broader meanings have specific meanings. So for example, your travel insurance policy might say that it covers money, but then it might define money as to include cash or include debit cards but then not to include things like traveller's cheques or it might not include credit cards.

Similarly, it might include documents but then not include within documents driver's licenses. That's kind of another pothole in these policies is that the words within them will have these very specific meanings that might not match what a common understanding is.

Then another area would be missed departure cover. So that's an area of the travel insurance that will cover you if there's like a traffic accident or something and it means that you're late to a departing flight. It's a part of the cover which will provide money for getting onto the next flight. But what we find is that some policies will offer this but they might only offer it for your outgoing flight, but not for your returning flight or for the connecting flights.

Kat Cereda: And if you miss your outgoing flight, doesn't that sometimes mean that your return flight can get cancelled? Is that why that's an issue?

Dean Sobers: Potentially, because they all kind of knock on into each other. And again it's just that kind of weighing what's a likely common understanding going to be of something like missed departure cover versus what is there actually in reality.

Kat Cereda: When I go on holiday, I tend to just like to lie by the pool and attempt to get a tan. But I know some people like to have a bit more of an activity-filled holiday. And that could be a real reason for buying travel insurance. Can you talk to me about this? Because I know that there are some – a bit of trickiness surrounding hiking, for example, and things like that.

Dean Sobers: Yeah, so there's a huge range of things that insurance policies could cover. Part of where this kind of comes into definition is the sorts of activities that you're going to be engaged in. So if you're going on like a hiking holiday or if you're doing golf or extreme sports, you might need to look into insurance that will specifically cover what it is that you plan to do.

So with hiking, what we found was that pretty much all insurance policies that we looked at have altitude limits. They will cover you up to a certain altitude or elevation. So these range between 1,000 metres and 6,000 metres. So for context, 1,000 metres is approximately the height of Yr Wyddfa, formerly known as Snowdon – it's the correct name for Snowdon. So if you're in a mountainous region where the average height is likely to get higher than that, then even just walking about, you might be walking above where your travel insurance is willing to cover you.

Kat Cereda: People might just think they're going for a normal hike and realise that they've actually broken the conditions of their insurance. I guess that's something that people wouldn't normally think about; they'll just kind of think, "Okay hiking, I'm covered," but go up that what to them might be a tiny little hill and suddenly they're out of the conditions.

Dean Sobers: Exactly, yeah.

Kat Cereda: So if you are planning to do something active, what advice would you give when looking at insurance?

Dean Sobers: Again it kind of circles back to the original bit of advice where I was suggesting that you kind of make that list of what is it I'm going to be doing on the holiday and what cover do I want to apply for me when I'm going on a holiday.

So for example if you're going on a hiking holiday, it's checking the wording to see that that's covered as an activity, to what altitude or in what type of terrain. Are there any kind of exclusions around that? In lots of cases, if the cover for an activity isn't in there as standard, it will be available as an optional add-on, but you obviously need to know that you need it before you buy it.

Kat Cereda: So let's talk medical cover. What do people need to know about declaring their health when they're booking a travel insurance policy?

Dean Sobers: Most of us have medical conditions of some type or other. Most of those conditions can be covered on an insurance policy without it bringing up the price by a significant amount. You can buy affordable cover to cover most medical conditions.

However, if you don't declare a medical condition, then in the vast majority of cases, it's going to be excluded by default. You'll be in trouble if you need to claim for it and you haven't got the cover for it. I think this is a key reason that lots of claims end up getting turned out. Medical claims are the most common type of claim, so it's one of the most used parts of a travel insurance policy.

Kat Cereda: And are there declarations that people might not realise that they do actually need to make?

Dean Sobers: I think so, because there can be confusion over whether or not you have a medical condition. So for example, maybe if you've had some treatment for high blood pressure and the treatment has normalised your high blood pressure, so you don't have high blood pressure, but what the insurer might want to know is if you've been treated for it. So you might assume that you don't need to declare it, but then in fact you should declare it.

The key thing there is to just engage with the questions that are asked in a direct and upfront way. And if there is any ambiguity – often our medical history won't necessarily fit the form, there'll be complexities, or we won't necessarily be able to give an accurate account of it in the questions that are asked – that's where you need to contact the insurer to make sure that they are actually able to cover you properly and that you're giving them the correct information.

Kat Cereda: Okay and what about things like weight loss medication?

Dean Sobers: Yeah, actually that's an interesting area, but there is kind of a question if you don't have an underlying medical condition besides a need to manage your weight, do you need to tell your insurer about that when talking about medical conditions? So when we looked at the policies in our analysis, we found that over half of them you are expected to declare being on a prescribed weight loss drug.

Kat Cereda: And that's quite interesting because I think a lot of people take them and aren't necessarily that loud about it, so it's something they probably don't even consider when they're filling in the form. So it's very important and a very noteworthy point that it is something crucially you have to enter in that form.

But yeah, you've been doing all this research into the best policies and the best providers, and our Which? reviews stop people from having to do all the work themselves, so it's always great to use the Which? resources. In your opinion and from your findings, what are some of the best providers out there?

Dean Sobers: So we looked at 160 policies from 47 providers. 14 of those providers managed to get a product that we decided was of Best Buy quality. And what that means is that on paper it has cover that we think is very good compared to the rest of the market. And we also looked at things like claims acceptance rates and complaints just to see if there were any flags there. So these providers did not raise concerns for us in those areas.

The companies that made the grade or that had some of their products making the grade were AllClear, Barclays, Co-op, Columbus Direct, Cover to Go, Flexicover, GigaSure, Holiday Safe, Insurancewith, InsureandGo, Just Travel Cover, Infinity, Nationwide Building Society, and Saga.

Kat Cereda: That's quite a long list. That's reassuring to know that there are quite a few providers out there that are providing service that Which? can get behind. That's reassuring.

Dean Sobers: In terms of the actual products, it was 24 products out of 160 that we looked at altogether. So it's a reasonably small chunk of the policies overall, but there are lots of providers, because providers tend to offer a range of products for different price points and different levels of cover. But quite a good share of the providers that we looked at had at least one product that kind of passed that threshold for us.

Kat Cereda: If someone is listening and they do need to make a claim, what should they know about how the process actually works?

Dean Sobers: So I'd say the first thing is to contact the insurer as soon as possible, as soon as it becomes apparent that you might need to make a claim. It's important because there might be certain parts of the process that you need to be aware of that might inform how you act.

For example, if you're thinking about cancelling a holiday and so you think you might need to make a cancellation claim, it might be that you can't make a cancellation claim unless it's within a certain number of weeks of the departure date. So if you cancel it before then, you actually won't be able to – you'd be cheating yourself out of making the cancellation claim.

Similarly, if you're making like a crime-related claim, the insurer will probably need you to get hold of like a police report and things like that. So contacting them for advice on kind of what to do, even if you don't end up making the claim because you might have other protections, it's just a good idea to go to them first.

Then just following the procedure, trying to keep a record of how the process goes, just in case if it goes off the rails, it's good to have a paper trail so you can work out who said what and when.

Kat Cereda: Because what if it does go wrong? What are people's options then?

Dean Sobers: So what we would recommend is making a complaint.

Kat Cereda: Who do they complain to?

Dean Sobers: So you complain to the – well, okay, so this can vary because it depends what went wrong. But the insurance policy document – that big document that I was talking about earlier that no one wants to read – it should lay out what the complaints process is for that provider. So that should help you identify who it is you need to contact and what the best channel of contact would be.

We usually recommend that complaints are made in writing; it just means that you can structure it and it kind of takes the emotion a little bit out of it and it also keeps that paper trail so you can refer back to it in future if you need to.

Kat Cereda: Sure.

Dean Sobers: The accountability generally lies with the insurer. When I say the insurer, what I mean is the company that is ultimately responsible for authorising your claim or not. However, sometimes that company is a different company than the claims handling company that you might be dealing with to actually administer your claim, or the company that sold you the policy, which could for example be a broker.

And sometimes, if the issue is to do with like the sale of the policy, if something went wrong there, then it might be that broker for example or that intermediary that you would need to complain to. So accountability for different issues can shift, but if it's to do with how the policy itself is working, then it should be with the insurer.

Kat Cereda: So let's finish on a positive in terms of how to best protect your holiday ahead of time. I know I've spoken on it previously that people might not realise it, but the best way to protect your holiday is to actually do it through a package deal. Talk to me about that.

Dean Sobers: Yeah, so I guess it kind of goes back to when we were talking about missed departure cover and how something going wrong in one part of the trip can have knock-on effects to other parts of the trip.

If you've organised everything by yourself with different companies, then you're not necessarily going to be able to – if something goes wrong with what one company is doing, the other company you're not going to be able to go to them for losses that you've – you're not going to be able to go to the hotel provider for something that's the fault of the airline, right?

But if you arrange it through a package holiday, then that's one company that's in charge of the whole thing, so that's one point of accountability. If the package holiday company goes bankrupt, you've got ATOL protection, which means that you shouldn't lose a deposit because of the financial failure of that company. There's far less risk to doing that. It might be more expensive, but there is far less risk compared with organising everything piecemeal by yourself.

Kat Cereda: It's worth the extra bit of money.

Dean Sobers: Yeah.

Kat Cereda: So we're coming to the end of our chat today, but what are your top takeaways for someone listening to this who is about to go on holiday and pick the right travel insurance for them?

Dean Sobers: Okay, so I can think of three things. So number one would be – and we say this all the time, but shop around. It's really important. One of the reasons it deserves particular emphasis with travel insurance actually is that sometimes you can be looking for example on a comparison site and think you're seeing pretty much all of the market, when in fact quite a lot of travel insurance providers aren't represented on the comparison sites.

And that can give you a sense – for example if the ones that are on comparison sites aren't giving you an affordable price, it can make you think that you're uninsurable, when in fact if you looked a little bit further afield you might be able to find something a lot more reasonable.

So shopping around is really important to try and spend a bit of time doing. If you're finding it really difficult, then perhaps try a broker; you can use the British Insurance Brokers' Association, BIBA – they've got a Find Insurance website that can kind of help with that.

The second tip I'd give is about checking the cover levels and checking that they match your needs. Read through that big book that you don't want to read to make sure that you're not going to assume something is there and then later find that it isn't.

But then also there's a kind of reverse side of it. So if your holiday costs £500 altogether, you're probably going to be paying a little bit more than you need to if you get one that's got cancellation cover of £5,000. So kind of finding a policy that kind of fits your needs is important just to make sure that you're not overpaying or that you don't have false confidence in a cheaper policy.

And then lastly – and we kind covered this a little bit – but if something goes wrong, don't be afraid to make your dissatisfaction known to the insurer; don't be afraid to complain. So looking at it in terms of the statistics, in over half of complaints made to insurers, the insurer upholds the complaint, which means that they accept some aspect of wrongdoing and they try and make it right.

So one thing I always say is it's a really powerful tool, complaining. It can feel like it's an onerous thing and it can feel like it's not going to work, but it's really worth doing.

Kat Cereda: It's worth making a fuss.

Dean Sobers: Yeah.

Kat Cereda: Well, that's all really useful advice. Thank you for your time, Dean.

Dean Sobers: Thank you.

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