General Insurance Article - Protect your holiday as travel insurers give Brexit warning

It’s January! Time to take down the tinsel and book up your summer holiday. According to ABTA, January and February are the traditional busy ‘sale’ months for holidays with plenty of incentives such as early bird discounts, free child places and book now – pay later offers designed to get you committed to your summer holiday months in advance.

 However, whilst holidaymakers are quick to arrange their summer sun getaways, researchers from GoCompare travel insurance have found that over half of UK sunseekers leave their travel insurance to the last minute, seeing them miss out on valuable cancellation cover as a result.
 With added concerns this year due to Brexit in terms of possible travel disruption and economic uncertainty, travellers are being urged to insure their holiday as soon as they book, to benefit from valuable cancellation cover.
 Research based on over half a million single trip travel insurance policies1. bought in 2018 found that 58% of holidaymakers arranged their protection within a week of their departure date. More than half of those (31%) arranged their travel insurance on their actual day of travel.
 On average, just 16% of holidaymakers arrange their travel insurance more than a month before they go on holiday. The further in advance you take out your travel insurance the more likely you will be to benefit from the cancellation cover it offers and the more likely you are to make a successful claim.
 But how often do people have to cancel their holidays?
 According to the Association of British Insurer’s (ABI) most recent statistics2., there was an 11% increase in the value of claims for trip cancellations in 2017 going up from £130m in 2016 to £145m in 2017. They say this increase was driven by airline disruption, bad weather and an increase in the average cost of a family holiday. Although claims for medical treatment make up the majority of travel insurance claim costs at approximately £201m, holiday cancellation pay outs are the second largest at £145m.
 Why is it important to buy your travel insurance early?
 Insurers will only consider claims if they are prompted by events holidaymakers could not have known about before buying their insurance. For example, imagine you book your holiday in January to travel in August. Then in July one of the people in the party falls seriously ill resulting in you having to cancel your trip. If you’d arranged your travel insurance soon after booking your holiday you should be able to reclaim the cost of your holiday under the policy’s cancellation cover, up to the specified limits and minus any excess.
 However, if you or a family member fell ill after you’d paid for your holiday but before you’d arranged your travel cover, you couldn’t then buy insurance with a view to potentially claiming on it as you would already be aware of the reason why you might cancel your holiday.
 Holiday party members falling ill aren’t the only reason why trips have to be cancelled. According to independent financial researcher Defaqto, 97% of single trip travel insurance policies also provide cover if you need to cut short or cancel your trip altogether, as a result of redundancy3.. However, most policies won’t pay out if you chose to take voluntary redundancy or if you were already aware of the redundancy before taking out the policy.
 Having a major incident such as a serious fire or flood at home may be another reason why you might want to cancel or postpone your holiday and may be covered under your travel insurance policy. Also, you cannot usually refuse to carry out jury service because of a holiday booking, but if you didn’t know about your jury service before you arranged your insurance you may be able to reclaim some or all of the costs of cancelling or postponing your trip.
 Matthew Sanders, travel insurance spokesperson at GoCompare, said: “Families can spend several thousand pounds on their summer holiday and hundreds of thousands of holidaymakers risk losing the lot by leaving their travel insurance to the last minute.
 The added uncertainty caused by Brexit this year should definitely focus the mind on protecting this investment. Having to cancel your holiday due to unforeseen circumstances is bad enough, but at least if you’re covered by a decent travel insurance policy you can make a claim and rebook your trip for another time.
 “Most travel insurance policies offer cancellation cover, but some budget policies may not, so always check that you are buying the right cover to suit your needs. Although £20,000 of cancellation cover may seem excessive to protect two weeks in the sun, choosing a policy offering just £500 of cover, or even worse, no cancellation cover at all, could be expensive false economy.
 “Cancellation cover is an often-overlooked benefit of travel insurance, but as figures from the ABI show, it’s cover that helps thousands of customers reclaim cancelled holiday costs every year. And although you should arrange your travel insurance very soon after booking your holiday, don’t feel rushed into immediately buying the holiday operator’s or travel agents’ packaged cover as it’s usually one of the most expensive ways to buy travel insurance. Instead, book your holiday then compare the best value deals offering the cover you need on a price comparison website like GoCompare.”  

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