Holiday insurance on a shoestring

Many holidaymakers choose not to purchase travel insurance, seeing it as a waste of money. But should something happen to you on your trip, this small outlay can be well worth it in terms of the money it could save you on medical care. Here we look at ways to keep the cost of your travel insurance down.

The first way to save is to travel light. Budget airlines often charge you for each bag you carry onto a flight, and the more valuables you carry with you, the more it will cost to insure. Instead, you could just carry the essentials in your carry-on bag and then opt out of paying for the lost or damaged luggage part of your travel insurance policy.

Weigh up the cost of your travel insurance against the cost of your actual holiday. In some cases, very cheap flights and city breaks can actually cost more to insure than they cost to buy in the first place. Also, if an excess payment is required, check to see if this less than the cost of your budget holiday before deciding whether insurance is worth it for you.

It may surprise you to learn that some holidaymakers make the mistake of paying for too much travel insurance each year. Make sure you are not one of them by checking all of your current insurance, medical and credit card policies for any existing overseas cover that may be included. It may turn out that you have all the cover you need already.

You may have heard of financial default cover. This is a travel insurance add-on that you can choose to take out if you are particularly worried about the financial standing of the travel company or airline that is arranging your trip. However, if you are confident in the financial security of your travel company during the current recession then you could save some money by not paying extra for this type of policy.

If you are a UK citizen travelling to Europe, then you could save a little on medical cover by obtaining a free European Health Insurance Card. Although it does not cover you for all medical costs, and will only pay for state-provided medical treatment, it does mean that you are entitled to free or subsidised healthcare in every country in the European Economic Area.

You want to make sure that any travel insurance policy you consider will be willing to pay out in the event of you having to cancel your holiday. Pay particular attention to trip cancellation clauses in policies so that you know which causes they will accept as valid reasons for refunding the cost of your trip.

If you take budget flights abroad on a regular basis, it could really pay you to opt for an annual insurance policy instead of single trip cover every time you fly. Your premium will be lower, and you will be covered for a whole years worth of travel too.