The year of the Staycation

This is the year of the Staycation according to Defaqto's latest report into the travel insurance industry.

Brian Brown, Head of Insight and author of the report believes that due to the credit crunch, people in the UK may to choose to limit themselves to one trip abroad this year, and spend more time visiting friends and family in the UK.

He said: "This year customers are more likely to take holidays at home rather than abroad. The number of overseas trips is showing a decline for the first time in two decades with fewer trips to many of the usual destinations."

Brown believes that with fewer holidays being taken abroad this year, the balance between buying single trip or annual trip cover could swing back in favour of single.

He added: "For most customers taking just one overseas trip a year will mean that purchasing a single trip policy makes more sense."

The report, Travel Insurance 2009: The Year of the Staycation suggests that with the current economic climate the value of an annual travel policy will cease to exist.

Brown said: "Customers will not purchase annual travel cover for the time being. Certainly as policies lapse they will be less likely to be automatically renewed."