Travel

Why the cost of holiday insurance could soon go sky high

Holidaymakers planning a trip in 2021 are urged to buy an annual travel insurance policy now to avoid post-Brexit price surges

  • Experts believe prices are likely to soar for travel insurance after Brexit 
  • Travellers are encouraged to buy annual travel insurance policy now
  • Holidaymakers will also be impacted by the removal of the EHIC scheme 

Travellers are being encouraged to buy their annual insurance policies before the year ends to avoid post-Brexit price increases.

An annual policy starts at less than £20 for travel to Europe and around £45 for worldwide, according to comparison site MoneySuperMarket.

But experts suggest travel insurance premiums could increase by 10 per cent to 20 per cent after the UK leaves the single market.

Holidaymakers will also no longer be able to use the popular European Health Insurance Card, after they expire. 

Experts suggest travel insurance premiums could increase by 10 to 20 per cent after the UK leaves Europe

The card gives you access to state-funded medical treatment in EU countries, although this should not be used in lieu of proper travel insurance. 

Now only a select group of Britons will be able to access this, meaning travel insurance is even more important than ever. 

Helen Chambers, head of travel insurance at MoneySuperMarket said: ‘If you’re keen to make 2021 the year you get back on board a plane, take more trips, or even if you plan to take advantage of the beautiful holiday destinations of the UK, taking out an annual travel insurance now, before the end of 2020, could save money versus what we expect the same policies to cost in 2021.’

‘Even if you don’t know exactly where you plan to travel to next year, with prices for an annual policy starting at less than £20 for travel to Europe, and just over £45 for worldwide travel, getting organised now could really pay off.’

Extra features to cover cancellations related to Covid-19 have also been added to a number of policies, which experts say will further push up premiums.

When looking for holiday insurance, make sure it covers the value of your baggage, personal belongings and cash you are bringing. 

Cancellation cover should be equal to or higher than the cost of your trip, including excursions. 

Travel: Many UK residents will be hoping to get abroad next year for a much needed holiday

Travel: Many UK residents will be hoping to get abroad next year for a much needed holiday

Medical cover of £2million should be enough and around £1million is recommended for personal liability, in case you are held responsible for damaging property or injuring someone.

Aim for a low excess, which you must pay towards your claim, of no more than £100.

Chambers added: ‘It is worth noting the advantage of having an insurance policy in place at the time you book versus making a last-minute purchase.

‘Buying a policy, the day before you travel will give you important cover while you are away, however you will be missing out on the benefit of having cancellation cover in place in the run up to your trip.’

However, not all experts believe that insurance prices could soar.  

Chris King, head of travel insurance at Compare the Market, added: ‘One of the main changes after January 1 is that any healthcare charges incurred by a UK resident in an EU country will be directed to the individual rather than the UK government, as has been the case under the EHIC. 

‘As such, those without travel insurance and without access to an EHIC card could face an expensive bill if they require medical attention whilst visiting an EU country.

‘People who purchase travel insurance before or after January 1 may not notice any difference in the cost of the policy or in the event of making a claim. 

‘Travel insurers price their products based on the unique profile of the customer and the level of cover the policy provides. 

‘As such, there is no immediate or obvious reason why travel insurance premiums would rise after January 1, but this could vary between providers and the policies they offer.’

UK Global Health Insurance Card 

In place of the EHIC, next year Britain will issue the UK Global Health Insurance Card.

It will allow state-provided medical treatment if people fall ill or have an accident in the EU, Switzerland, Norway, Iceland or Liechtenstein.

It will cover chronic or existing illnesses, routine maternity care and emergencies but specialised treatment, such as dialysis, will require ‘a prior agreement’ to make sure it is available.

As before, there is no provision for taking you home free of charge if you fall seriously ill or suffer a serious accident. Only travel insurance will cover that. 

It is also not known when this will be introduced with current details simply saying it will be available in the future. 

King added: ‘Even after this proposed card is introduced it is still highly recommended that UK residents obtain travel insurance before travelling to Europe or elsewhere in the world, as bespoke cover from a provider is likely to be more comprehensive and tailored to the requirements of the individual.’

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