Do i need holiday insurance with package holiday?

Why ATOL protection is not enough

Many UK travellers assume that because their trip is ATOL protected, they do not need separate travel insurance. This is a common misconception that can lead to significant financial risk. ATOL (Air Travel Organiser's Licence) is a UK financial protection scheme that ensures you do not lose money or become stranded abroad if your travel company collapses. However, ATOL does not provide any cover for medical emergencies, accidents, or theft of personal property. If you fall ill on a package holiday without travel insurance, you or your family will be responsible for the full cost of your medical care and any emergency flights back to the UK.

• ATOL covers travel company insolvency only
• It does not cover medical expenses or surgery
• It does not cover the cost of emergency repatriation
• Personal liability for accidents is not included
• Lost, stolen, or damaged luggage is not protected

What holiday insurance covers on a package trip

A comprehensive travel insurance policy works alongside your package holiday rights to fill the gaps in protection. While the tour operator is responsible for the delivery of the holiday components, the insurer is responsible for your personal well-being and financial losses due to unforeseen events. Most policies include cover for emergency medical treatment up to several million pounds, which is essential even in countries where the GHIC is accepted. It also provides cover for cancellation due to reasons outside the scope of the Package Travel Regulations, such as a family bereavement or a redundancy that occurs after you have booked.

• 24-hour emergency medical assistance
• Cancellation cover for personal reasons
• Replacement of lost or stolen passports and documents
• Legal expenses for seeking compensation
• Curtailment cover if you must return home early

Common exclusions to watch out for

Even the best insurance policies have limits and exclusions that you must understand before you travel. Most policies will not pay out for incidents involving alcohol or drug misuse, or for claims arising from reckless behaviour. If you are planning to take part in high-risk activities like scuba diving or skiing, you must ensure these are specifically listed in your policy wording. Additionally, standard policies generally exclude claims related to pre-existing medical conditions unless they were declared and accepted by the insurer at the time of purchase. Failure to disclose your medical history can result in the entire policy being voided when you try to make a claim.

Typical costs and pricing factors for UK travellers

The cost of holiday insurance for a package trip depends on several factors, including your age, your destination, and the length of your stay. For a healthy traveller aged 30 heading to Europe for a week, a basic policy can start from as little as £10 to £15. However, prices increase for destinations with high healthcare costs, such as the USA or Canada. If you have pre-existing medical conditions, you may need a specialist policy which will carry a higher premium but ensures you are actually covered for the risks most relevant to you. Annual multi-trip policies often provide better value if you plan to travel more than twice in a twelve-month period.

Choosing cover for pre-existing conditions

When booking a package holiday, it is vital to arrange your insurance as soon as the booking is confirmed. If you have a pre-existing medical condition, you must declare it during the screening process. MoneyHelper provides a directory of specialist insurers for those with serious conditions who may find it difficult to get cover elsewhere. Accurate declaration ensures that if your condition worsens and you can no longer travel, your cancellation costs are covered. It also guarantees that any medical treatment related to that condition while abroad will be paid for by the insurer rather than out of your own pocket.

• Always declare every diagnosed medical condition
• Check if your condition is on the 'automatically covered' list
• Ensure the cancellation limit matches your holiday cost
• Keep your medical declaration up to date before each trip
• Use the MoneyHelper directory for complex cases

The role of the GHIC and FCDO advice

The Global Health Insurance Card (GHIC) allows UK residents to access state-provided healthcare in EU countries at a reduced cost or for free. However, the NHS and the FCDO both state that a GHIC is not a substitute for travel insurance. It does not cover private medical care, mountain rescue, or the cost of flying you back to the UK. Furthermore, you should always check the FCDO travel advice for your destination before you depart. Most insurance policies are invalidated if you travel to a country or region where the FCDO advises against 'all travel' or 'all but essential travel'.

How to make a claim and gather evidence

If you need to make a claim on your holiday insurance, the burden of proof lies with you. For medical claims, you must contact your insurer's 24-hour emergency line as soon as possible, as they often need to pre-authorise expensive treatments. If your belongings are stolen, you must obtain a police report within 24 hours of the incident. For cancellation claims, you will need to provide a medical certificate or evidence of the event that prevented your travel. Always keep copies of your booking invoices and any receipts for expenses you intend to claim back, as the Financial Ombudsman Service (FOS) often sees disputes where evidence is lacking.

Practical checklist for package holiday travellers

Before you head to the airport, ensure you have all your documentation in order. Having a package holiday gives you a great safety net, but your insurance policy is your personal shield against individual misfortune. Check that your policy start date is the day you booked the holiday, not the day you travel, so that you are covered for cancellation immediately. Share your policy number and the emergency assistance phone number with a family member or friend back in the UK so they can help you in an emergency if you are unable to communicate with the insurer yourself.

• Confirm your policy includes ATOL-style 'Supplier Failure' if needed
• Print a physical copy of your insurance certificate
• Save the insurer's emergency contact number in your phone
• Check your cancellation limit covers the total trip cost
• Verify that all travellers' names are spelled correctly