What Price Should You Pay For Your Travel Insurance?

We look at the sorts of prices that you should be aiming for when buying travel insurance.

This article was first sent to Fools as an email in our 'Summer Lolly' series.

It's hard to compare travel insurance because of the vast differences in small print, so I'm using as many websites as I can including lots of Money this and Money that sites like Moneyfacts, Moneyexpert etc.And, of course, I shall use The Motley Fool's own travel insurance tool, which has been significantly improved recently.

Policies must have certain minimum standards to be adequate, so I'm not simply looking for the cheapest policies, but I'm looking for the sort of price you should expect to pay for policies that fit my criteria.

Binning such paranoid things as compensation if you're hi-jacked, my minimum standards include:

• Medical cover: of at least £2m, but these days I prefer £10m, as it's not that much more expensive. This should cover repatriation of you or your body, as this can be expensive for you or your family.
• Personal liability of £1m is the bare minimum. Seriously! Remember though that if you injure a young person who earns the equivalent of £30,000 per year and that person is no longer able to work, you'll probably be liable for loss of earnings over the course of that person's life going somewhat over £1m. In most cases, £2m should be adequate.
• Cancelled holiday payout of £3,000. If you have to cancel or curtail your trip for reasons beyond your control, a possible payout up to this amount should be reasonable recompense for most people.
• Baggage problems up to £1,500. You may be able to go for a lower limit if you travel light and without expensive equipment.

Winter cover should include:

• Sports equipment in transit.
• Replacement or repair of sports equipment.
• Loss or damage to hired equipment.
• Compensation for unused pre-booked ski packs.
• Avalanche and piste closure cover.
• Protection for off-piste skiing and snowboarding.

Based on these minimum standards, there are lots of products with comparable prices, but they are usually off the cheapest rates by just £5 or so.

Prices vary a lot. Make sure you're getting a decent deal by checking my rough guide below to the prices you should be getting. If you're not getting them, you're perhaps not looking hard enough!

Individuals under 65

*Based on visiting Germany for two weeks.

**Based on the USA

Family of three, all under 65

*Based on visiting Germany for two weeks.

**Based on the USA

Sadly I have neither space nor time to do couples or families of four or more. Sorry.

If you're 65, you should still compare the whole market, but as you approach 75 and especially 80, finding insurance cover can be very difficult. For older people, Which? has recommended Intune Group, which is owned by Help The Aged. From my brief tests it looks like it's the best price around for people over 80, too.

The above rough figures are for the basic policies, but other things to consider might include optional golf cover, separate rock-climbing insurance, and so on. Think about what you're going to do and check the small print to ensure it covers the risks that are most likely to happen to you.

If you're not sticking to populated areas with hospitals, you should strongly consider searching for policies that include the cost of air ambulances, and perhaps even sea rescue. Air ambulances can cost £30,000 or more. The cheapest policies won't include this.

You may perhaps consider legal expenses of at least £15,000 to be important. This could help you get compensation if someone injures you abroad or, in some policies, if your home is damaged whilst your away. Subject to conditions, naturally.

Don't forget to take your Emergency Health Insurance Card to Europe. (It replaced the E111.) Not only might it be quicker and easier to use than your private travel insurance but you can sometimes get a reduction on the excess you pay for your travel insurance claims, too.