Package Holiday Insurance

Why package holiday insurance matters

Many UK travellers assume that because their trip is 'protected' by ABTA or ATOL, they do not need separate insurance. However, these schemes primarily protect you if the travel company goes bust. They do not cover personal mishaps such as breaking a leg, losing your passport, or needing to cancel your trip due to a family bereavement. Package holiday insurance fills these vital gaps, providing a safety net for the individual risks that the travel organiser is not responsible for. Without it, a medical emergency in a popular destination like Spain or the USA could result in costs reaching tens of thousands of pounds.

• Covers emergency medical expenses and repatriation
• Protects against personal cancellation or curtailment
• Provides compensation for lost or stolen baggage
• Offers personal liability cover if you accidentally injure someone
• Supplements the basic legal protections of the Package Travel Regulations

What is typically covered

A standard policy for a package trip includes several core components designed to mirror the length and value of your holiday. Most policies provide between £2 million and £10 million in medical cover, which is the most critical element of any plan. Cancellation cover is another major pillar; this should ideally match the total cost of your package per person. If your holiday was booked as a single transaction, the insurer treats the flights, accommodation, and transfers as one entity, making the claims process for a cancelled trip more straightforward than with DIY bookings.

• Emergency dental and hospital treatment costs
• Missed departure cover for UK outward journeys
• Delayed departure payments after a set number of hours
• Legal expenses and advice services
• Cover for scheduled airline failure if not protected by ATOL

Common exclusions to watch out for

Even the best package holiday insurance will have specific exclusions. Most policies will not pay out if you travel against the advice of the Foreign, Commonwealth and Development Office (FCDO). Similarly, incidents involving alcohol or drug abuse are universally excluded. If you plan to take part in high-risk activities like scuba diving or jet skiing, you must check if these are included or if you need an optional 'activity pack' add-on. Pre-existing medical conditions are also a major exclusion unless they have been explicitly declared and accepted by the insurer during the application process.

Typical costs and pricing factors

The price of package holiday insurance is influenced by several factors, including your age, your destination, and the duration of your trip. For a healthy traveller under 50, a week-long policy for Europe can be very affordable, whereas a trip to the USA or Caribbean will cost significantly more due to high local healthcare prices. Opting for a higher excess - the amount you pay towards a claim - can lower your premium, but you must ensure you can afford to pay it if something goes wrong. Annual multi-trip policies often provide better value if you plan to go abroad three or more times in a year.

Choosing cover for specific destinations

Your choice of policy should reflect where your package holiday is taking place. For trips within the EU, insurance is still vital despite the existence of the Global Health Insurance Card (GHIC). The GHIC does not cover private medical care or mountain rescue, which are common requirements in many European resorts. If your package is further afield, such as to the Maldives or Thailand, you should ensure your medical limit is high enough to cover long-haul repatriation flights, which can cost upwards of £50,000 on a private air ambulance.

• Europe: Ensure GHIC is valid but supplement with private medical cover
• USA/Canada: High medical limits are essential due to healthcare costs
• Cruises: Check for specific cruise-related benefits like cabin confinement
• Winter Sports: Add specific cover for equipment and piste closure
• Developing nations: Focus on high repatriation and emergency transport limits

Evidence required for claims

To make a successful claim on your package holiday insurance, you must provide documented evidence. For medical claims, this usually involves receipts and a doctor's report from the local clinic. If your belongings are stolen, you must report the incident to the local police within 24 hours and obtain a written police report. For cancellation claims, you will need a 'cancellation invoice' from your tour operator and potentially a medical certificate if the reason for cancelling is illness. Keeping digital copies of all booking confirmations and insurance documents makes this process much smoother.

Regulatory context and the FCDO

The Financial Conduct Authority (FCA) regulates insurance providers in the UK, ensuring they treat customers fairly. If you have a dispute with your insurer that cannot be resolved, you have the right to take your case to the Financial Ombudsman Service (FOS). It is also vital to monitor FCDO travel advice. If the FCDO changes its stance to 'advise against all but essential travel' before you depart, most insurance policies will allow you to claim for cancellation if your tour operator does not provide a full refund.

Practical holiday insurance checklist

Before you head to the airport, run through a final check of your insurance details. Ensure the policy start date covers the day you booked the trip, not just the day you travel, to protect against pre-departure cancellation. Check that the 'per person' limits for baggage and cancellation are sufficient for your needs. Finally, save the 24-hour emergency assistance number into your mobile phone so you can call for help immediately if an accident occurs while you are away.