Travel Insurance: Why You Should Buy When You Book Your Trip (2024)

Planning your holiday? Taking out insurance as soon as you book your trip provides you with immediate cover for unforeseen emergencies, such as catching Covid or losing your job, which could mean having to cancel your holiday.

Here’s all you need to know about when to buy travel insurance and how cancellation cover works.

Why should I buy when I book my holiday?

If the thought of a summer holiday has taken your fancy this year, you’re not the only one.

According to Simon Cooper, founder of package holiday provider On the Beach, firms such as his experienced a surge in bookings for summer 2022 once Covid testing requirements were relaxed in early January.

While fewer Covid tests for returning UK travellers indicate that the virus may not pose as much of a threat to holidays this year, the possibility of catching Covid or having to self-isolate, as well as a range of other risks that could stop you from getting away, still remain.

According to our insurance partner, CYTI, holiday cancellations and medical costs account for 85% of travel insurance claims. That means it’s important to have insurance protection before your holiday starts as well as during.

If you take out insurance early enough and something goes wrong meaning you can’t travel, you could claim for the cost of your holiday (minus the policy’s excess – the agreed amount you pay on each claim). This includes the full cost of the holiday itself – flights and accommodation – plus any pre-booked excursions or other extras, such as car hire.

What cancellation risks will my insurance cover?

Typically, travel insurance policies cover holiday cancellation as standard. However, accepted reasons for cancellation will differ between them. They can include:

• Redundancy: usually you will be covered if you, someone you are travelling with or your spouse, civil partner or cohabiting partner are given notice of redundancy after you booked your trip or purchased your policy – whichever was later.

• Jury service: you can recoup costs if the jury service cannot be postponed.

• Member of the Armed Forces, Police, Ambulance, Fire or Nursing services: you will receive a payout if you or someone you are travelling with has their authorised leave cancelled due to an unexpected emergency or an outing overseas at the time of your trip.

• Damage to home or business: you or the person you’re travelling with must have been instructed to stay at home (within seven days of your departure date) by a relevant authority due to severe damage of your/their home or your/their residence or place of business due to serious fire, explosion, storm, flood, subsidence or burglary.

• Stolen passport or visa: as an example of the cover conditions you might encounter, Admiral stipulates that your passport or visa must have been stolen in a burglary at your home in the seven days before your trip departure. You will only be covered if you cannot get a replacement in time.

• Pregnancy: a sample wording from insurer NOW says you will be covered if you become pregnant after you purchase your policy or book your trip (whichever is later) and you will be more than twenty-six weeks at the start or during your holiday or you are medically unfit to travel.

• Mental Illness: insurer TravelTime covers you if you can provide a medical certificate to show you are suffering from anxiety, depression or any other type of mental or nervous disorder

• Death, bodily injury or illness: the emergency must be certified by a medical practitioner. You will be covered if any of these emergencies apply to you, a relative, colleague, someone you are travelling with or a friend you arranged to stay with while on holiday.

Will my insurance cover Covid cancellation risks?

Almost all travel insurance policies cover cancellation for risks associated with Covid, such as falling ill with the virus before your booked departure.

In fact, financial information business Defaqto found that 95% of policies provide cover for this circ*mstance, compared to 72% early in 2021.

Additionally, policies may even cover cancellation if a member of your family, someone you planned to go on holiday with or the person you were going to stay with contracts the virus.

Your policy can also cover you if you’ve been told to self-isolate. Defaqto’s research shows that 48% will pay out in this situation.

A limited number of insurers will offer cover for cancellation caused by a change in travel advice from the Foreign, Commonwealth and Development Office (FCDO) – 3% according to Defaqto.

These include:

• Avanti Travel Insurance
• Churchill
• DirectLine

However, policies will not cover cancellation if you travel during a lockdown. A number of other exclusions and limitations may apply, so do read your policy details thoroughly.

Is there a difference between single trip and annual policies?

Purchasing an annual travel insurance policy is usually the better choice if you’re planning to take more than two holidays in the space of 12 months, as it works out cheaper than cover for a one-off trip, which is known as single trip travel insurance.

Unlike a single trip policy, where cancellation cover begins at time of purchase, cancellation cover for annual multi-trip insurance begins on the policy start date of your choice, so it’s important that you opt for your cover to start immediately.

What if I don’t purchase my insurance straight away?

It’s still worth taking out travel insurance even if you forget to do so straight away when you book. Your cancellation cover will start once you’ve purchased your policy or on your chosen policy start date (with an annual policy).

Aside from cancellation cover you will typically benefit from the following cover as standard:

• Medical and repatriation to cover medical bills, and get you back home (repatriation) if you fall ill while away
• Curtailment in case an emergency such as illness, bereavement or redundancy causes you to cut your holiday short
• Baggage and belongings in the event they are damaged, lost or stolen
• Liability cover in the event you injure someone or their property while you’re away.

How can I purchase travel insurance?