We explain what travel insurance excess is and how it can help you save money on your cover
MPO Travel Insurance Excess Guide
Most of us will be familiar with the term ‘excess’ when talking about general insurance policies, including car insurance, home insurance and travel insurance. An insurance policy excess can range from £0 to hundreds or even thousands of £’s, depending on the type of cover and the amount of cover.
Travel insurance policy excess can be confusing and it’s possible to agree to an amount without being fully aware of what you’re agreeing to. The cost of travel insurance can increase dramatically if you need to make a claim and your excess is high.
In this guide we’ll look at how travel insurance excess works and the things to look out for when you buy travel insurance to save any nasty surprises.
SUMMARY: Policy excess can be a quick and easy way to lower the cost of your cover. Generally, the higher the amount of excess you agree to pay when you claim, the lower the policy price.
What does excess mean in travel insurance?
Your excess is the amount of money you will pay the insurer towards your travel insurance claim. You will usually have to pay at least some excess for travel insurance claims, as well as for other forms of insurance claim e.g. car insurance.
Insurers will often include a set amount of excess in the terms and conditions of your policy. You can then offer to pay a certain amount of ‘voluntary excess’ on top of this when claiming. Voluntary excess can help reduce the cost of your policy, which is useful if you are on a tighter budget.
You might also have to pay a different amount of excess depending on what you are claiming for. A claim for loss of passport for example might have a lower excess than a claim for medical costs.
Note: Don’t get carried away and agree to a higher level of excess than you are willing to pay to try and cut costs. You might think it is unlikely you will need to claim, but you don’t want to risk losing half the claim amount for a high value item due to excess.
How does travel insurance excess work?
It can be a bit confusing to understand exactly how excess works if you haven’t claimed on policy that includes it before.
When you submit a travel insurance claim, you will need to pay your insurance provider a set amount you have agreed to in your policy terms and conditions. This amount is known as your policy ‘excess’.
This can include your insurer’s included excess amount (compulsory) plus any extra excess you have agreed to pay (voluntary). The amount you pay in excess will be removed from your overall claim amount.
EXAMPLE
Jess plans a holiday and is excited for her upcoming trip. She boards her plane, gets to her destination, and realises her luggage hasn’t arrived. As her luggage is lost, she is allowed to claim up to £700 as agreed in her travel insurance documents.
She claims for the full £700 but must pay £50 excess as set by her insurer plus her £100 voluntary excess (£150 excess in total). Her claim is approved, and she receives £550, as the £150 excess is deducted from the final amount.
Is travel insurance excess per person?
So, you’ve bought a joint or group travel insurance policy and now you need to claim. The issue here is whether you understand how excess works when your policy covers multiple people.
There are a few ways that insurers will charge excess for claims:
- Per person – you can claim for multiple reasons (e.g. more than one lost item) and you will only pay excess once overall
- Per incident – you pay excess for each item/event you claim for e.g. if you have a lost phone and a lost camera you would have to pay excess on both item claims
- Per policy section – if you claim under multiple sections of your policy documents e.g. cancellation and personal items, you would have to pay excess for each section
Group policies will most often charge excess per person, meaning each person in the group will need to pay excess even if it is one overall claim. If a package holiday for 6 people was cancelled and you pay excess per person, you could find a lot of your claim amount is lost to excess.
Can you get travel insurance with no excess?
Yes, it is possible to get zero excess travel insurance. These policies aren’t as widely available though, so you might need to do some research to find exactly what you are looking for. It could also be helpful to speak to a travel insurance specialist if you’re struggling to find the right policy.
Zero excess cover can seem a more appealing option than potentially losing out on some of your claim amount during the claim process. There are however few things to think about:
- Zero excess travel insurance can be more expensive, as voluntary excess will usually reduce the cost of your cover
- You might not be able to find a zero excess policy with the level of cover you need. This is especially true if you need to cover very high value items or have a medical condition that could lead to needing expensive treatment while you are away.
- ‘Zero excess’ doesn’t always mean you will pay literally nothing towards your claim. You might still have to pay excess for certain claims. Keep your eye out for other fees hidden in your policy documents, to avoid a nasty surprise later on.
More information – Travel insurance with medical conditions
Other useful travel articles
- Does travel insurance cover strikes?
- How do I know if my passport is valid?
- When should I buy travel insurance?
Find out the answers to all your biggest travel insurance questions in our MPO Travel section.
Resources
Civil Aviation Authority – UK Airline data
