Holidaymakers urged to check travel insurance small print

Check your insurance before taking the plunge to ensure a chilled time. Picture: Getty Images
Check your insurance before taking the plunge to ensure a chilled time. Picture: Getty Images
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Holidaymakers are being urged to check the small print on their insurance before heading overseas this summer after the government issued a new warning on travelling in France.

The Foreign & Commonwealth Office (FCO) has updated its guidance for British travellers to France, citing a “high threat” from terrorism.

The warning was aimed primarily, but not exclusively, at football fans visiting France for the European Championships and noted that the country is maintaining a national state of emergency until at least 26 July.

The update, which came just two weeks before Scottish schools begin to break up for the summer, also referred to flooding that is affecting rail and road travel, and planned industrial action on certain travel networks.

The FCO isn’t advising against travelling to or in France, but the statement is a timely reminder for those planning holidays this summer to ensure both that they are insured and that they know exactly what they are covered for.

Many travel insurance policies carry exclusions stipulating that they won’t pay for “claims arising from war risks, civil commotion and terrorism” or “travelling against FCO advice”. Few will provide cover for anywhere on the FCO’s list of places it advises against travelling to, which currently includes parts of Turkey and Egypt and all of Tunisia.

Travel-related complaints made to the Financial Ombudsman Service (Fos) include instances where the insurer has refused to pay out when a holiday has been curtailed because of a terror attack, or where a holiday has been cancelled because of an attack in the intended destination.

“We advise consumers that they need to be aware as to whether their policy will cover cancellation because of a terrorist attack and whether their policy suits their needs,” said a spokeswoman for the Fos.

When dealing with complaints it generally looks for exclusions such as “we will not pay for claims arising from war risks, civil commotion and terrorism” or “travelling against FCO advice”.

Those exclusions are often buried deep in the small print, however.

“Despite the fact that they are designed to provide reassurance, travel insurance policies can result in substantial costs for those who fail to read the small print,” said Gemma Sonfield, head of travel insurance at

Almost half of policies only cover valuables worth £250 or less and just one in ten pays out for valuables worth £500 or more, new research by the comparison service found. Those limits have remained largely unchanged even as expensive devices such as laptops, iPads and smartphones have become more widely used on holidays.

Some 45 per cent of policies only cover cancellation costs up to £3,000, leaving holidaymakers out of pocket if they’ve spent more than that on prepaid travel and/or accommodation. With the terms and conditions on the typical travel insurance policy adding up to nearly 27,000 words – more than on any other form of insurance – some of the most important exclusions can easily be overlooked.

“Terms and conditions can be lengthy, but failure to read them means many people may assume they are covered in all instances when they are in fact not,” said Sonfield. “Many fall into the trap of buying insurance at the last minute, which means that they may not receive a penny if they had to cancel their holiday unexpectedly in the run-up to going away, and a proportion of products offer no cover for often unavoidable misfortunes such as missed flights.”

Package holidays booked through firms with the Air Travel Organiser’s Licence (Atol) are protected. If the FCO’s advice changes the operator is responsible for either getting you home if you’re already there, or offering a fee-free alternative destination if you still haven’t set off.

Insurers paid out £365 million last year to individuals and families who needed help while overseas, according to new figures from the Association of British Insurers (ABI).

More than two-thirds of that was paid out for travellers’ medical expenses and repatriation, while £128m was to cover the cost of holiday cancellations and £16m for lost baggage and money.

Yet more than one in five risk travelling without insurance, the trade body warned.

“Holidays are meant to be enjoyable and relaxing, but they can be traumatic for some travellers who become ill or are injured abroad,” said Mark Shepherd, manager for general insurance at the ABI.

“Medical treatment in foreign countries can cost tens of thousands, which is why it’s essential to have a travel insurance policy that will cover you, should you need it. There are a wide range of policies available, so it’s important to shop around to find a policy that meets your needs, and be aware that a cheap policy is not right for everyone.”