Pricewatch: The pros and cons of travel insurance

A reader contacted us last week to give out about travel insurance. He and his wife took a policy out through their credit union and had the misfortune to be burgled while away. They lost €10,000 worth of stuff, including laptops, iPhones, jewellery and the rest.

"We received €350 compensation. On interrogation of the policy, we found that very little was covered. For example, the policy paid out on a laptop bag but not the laptop in the bag."

Most people “don’t have a solicitor on hand to scrutinise the fine print of their policy when buying it,” he says. “So is there a list of questions they should ask before purchasing a policy?

“In my own case, my wife purchased our policy from the credit union, a brand she trusted, and she opted for the most expensive policy it had on the basis that if it’s expensive and branded as ‘premium plus’ she assumed everything would be covered.”

Pro: Medical bills overseas can climb alarmingly quickly. If you are unfortunate enough to have your appendix removed in the US, you will be out of pocket by more than €27,000.

A minor heart attack in the US will set you back at least €35,000. If you have a bad heart attack while in the US, and you wish to be treated in a hospital for a couple of weeks, you can expect to pay at least €200,000. The angiogram alone will cost €22,000, and if you have to stay in an intensive-care unit you will have to pay a heart-stopping €5,500 per night. An air ambulance to repatriate you could top €80,000.

If you break a leg on a Swiss skiing trip, you will be out of pocket by about €10,000. A badly broken hip in Spain could set you back some €25,000.

Con: We had a look at the terms and conditions of several travel insurances policies in Ireland. They typically run to between 14,000 and 16,000 words or a third of the length of The Great Gatsby.

Pro: The most common reason people make travel insurance claims is cancellation because of illness or bereavement. If a policy is cancelled for either of these reasons, then all the private health insurance in the world won't help you. If someone close to you dies while you are overseas or before you travel, having travel insurance could save you thousands.

Con: We had a look at a range of policies and found the level of cover offered can vary considerably. Average multitrip family policies cost about €80. While companies outline all the benefits of their policies, they tend to hide exclusions in the small print. So we read the small print on several policies. Companies routinely disallow claims of more than €250 for "a single item, pair or set, or part of a pair or set . . . more than €250 for golf clubs, bags and accessories . . . More than €250 for valuables in total".

Policies would pay out only if valuables are “attended by a person insured or are in a safety-deposit box at the time they are lost, damaged or stolen”. So, if your hotel room is burgled, say, and your bags are stolen, you can just whistle for it.

Similarly, many policies do not cover “antiques, musical instruments, pictures, typewriters, portable telephones, any computer equipment, televisions, sports equipment while being used, glass, china or similar fragile items and pedal cycles”.

Pro: Unlike many insurance policies, travel insurance is not extremely expensive. An annual multitrip policy can cost less than €5 a month.

Con: Most travel insurance firms impose age limits or hit older customers with ridiculous tariffs for having the temerity to reach 65. Someone who tries to get travel insurance at 66 will pay twice as much as someone aged 65, even though there is absolutely no difference in the level of risk the two people pose to the companies.

Con: Paying on the double: if you have private health insurance, you are covered for most medical expenses you are likely to incur overseas, up to a limit of about €100,000 depending on your policy. If you have a European Health Insurance Card, you will be treated in all countries in the EU as if you were a citizen of that country should you fall ill.

So in some respects, travel insurance is almost entirely redundant.

PEACE OF MIND: HERE’S WHAT TO DO

1 Read the terms and conditions: Yes, they run to more than 15,000 words and you'll need a magnifying glass to read the small print, but there's no point in buying a policy only to find it's worthless because you weren't supposed to go rock climbing. If reading the document sounds like too much hassle, download a PDF version or copy the full text into Microsoft Word and search for "not covered" or excluded" or "exclusions". It's always worthwhile to find out what the companies don't cover you for.

2 Buy early: Almost two-thirds of all claims are for cancellations due to changing circumstances or family bereavement , which can obviously happen at any point between paying for and travelling to your destination.

3 Bring emergency contact details: Also bring a photocopy of your passport. If it is stolen, having all the details makes it easier to get a replacement.

4 Keep all receipts: If you incur any expenses because of lost baggage, crime or illness, make sure you hang on to your receipts. Unless you have receipts, most companies will completely refuse to pay out.

5 Call the police: Always contact the local police in the event of a theft – no police report, no claim.

'Was glad we had it.' The view from Twitter

We asked people what they thought. Here are just a handful of responses:

We have it. Think it's worth peace of mind. Used when I couldn't travel due to a bereavement and the process was grand. @MaryMc_31

Always have it, only needed it once when relative died suddenly and we needed to get home, worked well, was glad we had it! @macbubbins

Yes, it's cheap, paid for flight changes and extra seats last year when returning with broken ankle. @SheilaMacNally

Had to claim a few years ago for a cancelled holiday and worked fine. Will always have it just in case. @anniech13

Yep and had to claim it last year for honeymoon when I broke my leg. Straightforward and was reimbursed 99 per cent of cost. @aido77

My Dad died here while I was en route to Oz for daughter's wedding. Insurance covered very expensive flights home and two weeks unused Sydney rental. Very smooth process, no problems – would never travel without insurance, just not worth the risk. @ThePastryFork