What is holiday insurance?

Holiday insurance is a product designed so that when you travel abroad you are suitably covered for all the possible risks you could encounter. Whilst it is not compulsory, it's definitely of crucial importance should you be going away, in particular because of the medical expenses that you could incur should you fall ill or have an accident. But it's not just about medical expenses, other risks that you need to be covered for are the theft or the loss of your possessions, plus the cancellation costs or any claims made against you.

Although it is not compulsory, you may find that some tour operators or travel companies will insist that you get holiday insurance when you purchase a holiday. However, they can't force you to buy their policy, which is usually worse value than the holiday insurance that you might get from a broker or fro ma direct insurer. Travel companies used to offer a discount on your holiday assuming you bought their holiday insurance, but the lack of transparency with this meant that people would often come away with a worse deal in total. The Monopolies and Mergers commission (MMC) decided to ban this practice in November 1998, but travel companies will still offer holiday insurance, with the advantage for you supposedly in the convenience of not having to search for it, but you should definitely shop around for it before committing.

Before you buy a holiday insurance policy, spend the time researching holiday insurance so you can fully understand the different types of cover and how each type can meet your needs. Ultimately, you will want to find a balance between the coverage you buy and the cost of the policy. You can find the right policy by looking at four factors.

First, think about the level of medical cover that you require. You may be looking at telephone numbers when researching medical cover, but it really can add up to seven figure sums. If you happen to be skiing in the USA, for example, and have an accident up a mountain, for which you need a helicopter mountain rescue, followed by a couple of lengthy operations, followed by a period of recuperation in a hospital in the states, including the cost of flying visitors over, then it can add up. Should you have injured someone else in the skiing accident, you may need legal cover, and in the USA these add up as well, so this is why you need so much cover.

Then there is the value of your possessions that you want to cover, the amount of money that you are happy to spend on a policy, and how much risk you are actually prepared to tolerate.

© AskFinancially.com 2008

Travel Insurance

Insurance & Loans

Copyright

What is holiday insurance?

© AskFinancially.com 2008

Travel Insurance

Insurance & Loans

Copyright