Number of single trip travel insurance policies rises

The number of single trip travel insurance policies on the market has grown by nearly a quarter over the last three years, according to Defaqto.

This presents much more choice for consumers but, at the same time, makes it potentially more difficult for people to identify the right policy for their needs.

Defaqto data shows that there are currently 378 single trip policies on the market, compared to 308 in 2008 - an increase of 23%.  Not only are there a significant number of single trip policies for holidaymakers to choose from, there are also significant variations between policies in terms of the type and level of cover that they offer.   

Defaqto research has found that:

Travel abandonment - if a trip has to be abandoned, due to weather conditions or a strike for example, 40% of policies would provide £5,000 or more of cover for travel and accommodation costs, 14% would offer cover of less than £2,000 and 12% would provide no cover

Cancellation/curtailment of a holiday - 70% of policies provide cover of £3,000 or more if a holiday is cancelled, due to illness for example; however, 20% offer less than £2,000 of cover for this and 2% provide no cover at all

Missed departure - if someone were to miss their departure because of a failure of public transport or their car is involved in an accident or has a breakdown, 42% of policies would provide £1,000 or more of cover for extra accommodation and travel costs; at the same time, however, 8% of policies provide cover of less than £500 for this with 11% providing no cover

Lost or stolen money - 66% of policies cover less than £300 for the loss or theft of holiday money and only 8% offer cover for more than £500

Lost or stolen baggage - although 37% of policies provide total cover of £2,000 or more, 13% offer cover of less than £1,000 and 6% provide no cover at all for this

With the holiday season fast approaching, it is important for people to be able to understand the features and benefits that different policies provide to ensure they choose the right policy for their requirements.

According to Defaqto, there are five key issues that people should consider when comparing policies:

1.The benefit levels provided for important areas of cover, including medical expenses, baggage, money and cancellation

2.The single item limits applicable for ‘valuable items' within the baggage section of the policy and the maximum limits provided for ‘cash' within the money section

3.The policy excesses for each section of cover, and importantly how these are applied - are they per claim, per person or per section

4.Whether the policy includes a 24 hour international helpline number (and people should make sure they take this with them when travelling)

5.If they plan to engage in a potentially hazardous activity or sport, whether their policy will cover this

Mike Powell, Defaqto's Insight Analyst for General Insurance, said: "It is important for people that are planning a summer break, either abroad or in the UK, to think about arranging insurance to cover their holiday, their possessions and themselves.  Consumers have never had so much choice when it comes to travel insurance.  Not only has there been significant growth in the number of policies available, but policies are very different in terms of what they cover and the level of cover they provide.

"Although this is good news for consumers in many ways, the flip side of increasing choice is the complexity that comes with identifying the right option.  This is by no means an easy task.  The key is for people to focus on what they need from a policy in terms of features and cover and then to identify a product that provides this.  Although price is always likely to play a part in which policy someone selects, this should be a secondary issue rather than the main driver.  If people focus on price alone, they can risk buying a policy that falls short of their needs - and they will only discover this when it's too late and they come to make a claim." 

For more information about Defaqto, visit defaqto.com.