What is travel insurance and how does it work?

Travel insurance gives you financial protection if something goes wrong while you’re away. This means if you lose your luggage, need emergency treatment, or need to cancel your holiday, the insurance company will reimburse you.

Getting travel insurance when you have cancer can be difficult. So it’s important to start looking as early as possible.

Insurers will generally ask for details such as your age, holiday destination and any health conditions. They will also ask whether you have any ‘high-risk’ activities planned such as extreme sports. The more likely the company thinks you are to claim, the more it will ask you to pay. This is called a premium. An excess is the amount you may need to pay towards any claim.

The travel insurance you buy will either be:

  • Single trip – covers you for one trip abroad.
  • Annual – covers you for more than one trip in the same year.

Annual insurance may be more difficult to get with a health condition and is generally more expensive. But it may be worth considering if you’re planning more than two trips.

Travel insurance and cancer

It can be difficult to get travel insurance if you have cancer, or if you’ve had cancer before. So it’s best to look for travel insurance as early as possible. Ideally, you should start looking before booking your holiday. Travel insurance can be more expensive depending on where you are going. The USA and countries in the Caribbean usually cost the most. Certain types of holiday, such as cruises, can also be more expensive.

Our section on preparing to travel gives information about planning a trip or travelling when you have cancer. You can also talk to our financial guides.

What is travel insurance?

You might be travelling for business, to visit family, or for a well-deserved break. Hopefully your trip will go well, but there’s always a risk that something might go wrong when you’re away. For example, you may:

  • need emergency medical treatment
  • lose your luggage
  • need to cancel your holiday
  • need to return home early.

Travel insurance can give you financial protection if these kinds of things happen. This means that if something goes wrong and it’s covered by your travel insurance, the insurance company will pay you back for any related money you have had to spend. Or in some cases, they may pay the cost directly, for example to a health service provider.

It’s important to have travel insurance if you’re going abroad. But the decision about whether to buy travel insurance and what type of cover to get is a personal one. You should think carefully about the risks to your health and belongings when making these decisions.

How travel insurance works

Travel insurance companies will try to predict how likely you are to make a claim.

They usually do this by asking you some questions. You may either be asked these questions on the phone, or by an online form, depending on how you are applying.

The insurance provider will then use your answers to work out how likely you are to claim and how much that claim might cost them. They will also use their experience of previous claims.

Travel insurance companies will generally ask:

  • your age and the age of anyone else who would be covered by the insurance
  • where you are going
  • how long you are going for
  • whether you have any activities planned – for example, extreme sports
  • whether you have, or have had, any health conditions.

The more likely the company thinks you are to claim, the more it will ask you to pay for travel insurance. The whole process may not seem very personal, but the company is assessing and pricing the possibility of you making a claim on any policy it may offer you.

Premiums and excess payments

The premium is the amount of money you need to pay for insurance. An excess is the amount you may need to pay towards any claim.

You may need to pay an excess upfront before your insurer will deal with the claim. Or the excess may be deducted from the final claims payment. For example, if the excess on the policy is £50 and you make a successful claim for £250, the insurer may pay you £200.

Travel insurance policies have different sections covering different events. For example, there may be a section about what might happen if you are injured. Another section may only apply if you lose your belongings. Depending on your insurance provider and its policies, there may either be:

  • a single excess charge for any claim you make
  • separate excess charges for each section of the policy when you claim.

When there is a single excess charge per claim, this can mean you will pay less if you need to claim.

Single-trip and annual policies

Single-trip insurance covers you for one trip abroad. Annual (or multi-trip) insurance covers you for more than one trip in the same year.

Annual insurance may be more difficult to get with a health condition and is generally more expensive. If you are planning more than two trips in the same year, annual insurance is worth considering, but you should first check if it’s cheaper to get single-trip insurance for each trip.

Winter sports and activities

If you’re planning on doing winter sports such as skiing on your holiday, it can make it more difficult to get travel insurance. Travel insurance providers will generally ask whether you have any activities planned, and winter sports are considered high-risk activities. As a result, they may increase the premium or the excess.

Standard travel insurance policies often do not cover winter sports. Instead you often need to include winter sports cover. The high cost of medical bills if you get injured on the slopes means that getting the right cover is crucial for this type of holiday.

The same applies if you plan to do other activities or sports that carry a risk, such as diving, mountain biking or bungee jumping.

It’s important to check the details of any policy and make sure it specifically covers any activities you’re planning. Some policies contain exclusions which mean you wouldn’t be covered in certain situations – for example, skiing off-piste without a guide or without a helmet.

You can ask the provider if it’s possible to extend a policy so that it covers any extra activities you’re doing. If this isn’t possible, you could look for suitable specialist policies – these are sometimes advertised as activity travel insurance, adventure travel insurance or sports travel insurance.

Remember to check that baggage insurance would cover loss of (or damage to) any sports or activity equipment you take with you.

Back to Travel insurance