Travel insurance is big business. Before the COVID-19 pandemic struck, UK residents alone made an astonishing 93.1 million trips abroad in 2019, creating a massive market for insurance policies covering the likes of medical costs, loss of personal belongings, cancellations and plenty more besides.
The pandemic may have put a pause on much international travel. But it is sure to rebound strongly, and when it does, the COVID experience may well make people that much more conscientious about getting travel cover for their trips.
When it comes to buying travel insurance, at first glance there is a bewildering number of companies and brands offering policies. What’s the best way to choose between them? Do particular providers specialise in different areas, do they all have specific strengths and weaknesses?
These days, of course, we have comparison sites to help us find deals. But these don’t cover all the travel insurance options available. If you want to find the perfect policy for you, it helps to have at least some understanding of who the different vendors are and what they are best at providing.
The Big Insurance Brands
These are the big insurance houses that sell all types of insurance – the likes of Admiral, Churchill, Direct Lines and LV= that you can also go to for your home insurance, car insurance and the rest. They might not specialise in travel insurance in particular, but they are big respected brands that often have slick customer service and sales operations.
Buying travel insurance from one of these brands might be convenient if you already buy another insurance product from them. Their strengths usually lie either in offering both budget deals and deluxe insurance packages for the most comprehensive levels of cover.
On the other hand, they tend to be generalists. If you have a specific need, whether that’s a medical condition or you are travelling to take part in a particularly risky activity, these larger brands are often not the most competitive on price, adding big premiums for policy add-ons.
The Travel Specialists
There are dozens of travel-only insurance providers out there, and indeed you will often find travel agents and other travel companies offering insurance to travellers and holidaymakers as a sideline. These can often be relied on to offer the cheapest deals, especially if you find a company that focuses on travel policies for a particular region of the world.
Travel insurance specialists are also a great option for longer term travel, for example if you are looking for cover for a round-the-world trip. Most standard policies, even annual travel insurance policies, are sold with time limits.
The Niche Providers
Niche travel insurance providers fall into two main categories – those that cater for specific types of holiday and activities, like winter sports and cruises, that are generally not covered by standard policies, and those that specialise in medical travel policies for older travellers and people with pre-existing conditions.
In both cases, the focus is on offering policies that cover higher risks of medical pay-outs at fairer prices than general providers can manage. For insurance companies, covering the cost of medical treatment for overseas tourists is the biggest financial risk they take on, because private medical costs for foreign nationals are very high the world over.
If you plan to ski or take part in another potentially risky activity, if you are over a certain age or have an existing condition, the chances of you needing medical assistance abroad are higher than for the average holidaymaker. General providers respond to this higher risk by either refusing cover or hiking up their prices. That creates an underserved market that niche providers now fill.
The Insurance Outsiders
Finally, you can also find a significant number of big-name brands from outside the insurance industry selling travel insurance – a surefire sign of just how lucrative a market it really is. Out of these insurance ‘outsiders’ muscling in on the market, banks represent by far the biggest group, although there is also a significant bloc of high street retailers and supermarkets involved.
With banks, arguably the key selling point of getting your travel insurance through them is the fact that many throw in annual multi-trip policies as one of the added-value extras you get with premium paid-for current accounts and credit cards.
Not only does this work out to be a very cheap way of getting travel insurance, it is also very convenient – you don’t have to think about buying insurance for every trip or even renewing every year, it’s already there as part of your account or card service. The drawback is that these policies tend to offer very basic levels of cover only.
Similarly, with supermarkets and high-street retailers that sell travel insurance, they tend to be great for budget travel insurance, but you get what you pay for in terms of how comprehensive the cover is.
We are also seeing increasing numbers of these high street retail brands step back from the travel insurance market, John Lewis being a high-profile example. Click here if you are a previous customer looking for an alternative to John Lewis Travel Insurance.