The excess on your travel insurance policy is the amount you have to pay out before your insurer will settle a claim. Increasing your policy excess can be an effective way to keep travel insurance premiums low.
However, while setting a high excess may get you cheaper premiums, it does mean that you will have to pay out more before your insurance will kick in and swallow more of any loss yourself. Having a high excess can also make claiming on your policy almost pointless if the value of the claim is low; or prohibitive if you can't afford to cover it. So while it is possible to get cheaper travel insurance by going for a higher excess, you could be paying for cover that ends up paying you little or nothing.
For this reason, finding travel insurance with no excesses is becoming increasingly popular. We take a look at zero excess travel insurance and how to get the best deal.
Is excess free travel insurance right for you?
Balancing the cost of your travel insurance against the amount you would receive if you had to claim is important when you're searching for a new policy. The difficulty is that when it comes to travel insurance no excess to pay generally means accepting a more expensive premium.
However, having an excess on your travel insurance and paying a lower premium can be a false economy. If you need to claim, you will need to have the cash to pay for the excess yourself and if you don't have the money to hand, you could be left with a problem. And of course, the higher the excess the less chance you will want to claim.
The way insurers deal with claims can also be confusing. What you think is all one claim may be assessed as a multi-claim by your insurer. According to the statistics, more than three quarters of insurers charge an excess per policy section, so you could end up having to pay more than one if you claim.
For these reasons, paying the extra premium in order to be properly covered by single trip annual travel insurance with no excess could work out as the right financial decision but you need to give it a lot of consideration.
Essentially, you need to consider whether you want to pay more upfront in return for travel insurance with no or low excess, or take the risk that you won't need to claim and go for a cheap travel insurance policy with a higher excess.
Finding cheap travel insurance with no excess to pay
Although this option is not the cheapest travel insurance with no excess can still be found at a very competitive price. You need to compare travel insurance quotes and the cover they give you and make a call on which gives you the best, most affordable protection.
Just like all other types of travel insurance, it's important to get the basics right when you compare the cheapest travel insurance. This means making sure that you have cover for the right countries.
For example North America is often not included by policies that offer worldwide cover so if you are looking for travel insurance with no excess to USA, you might have to take out a specific policy. This is because medical expenses are so high in this part of the world so it's an added extra. Ironically, although it's further away travel insurance with no excess to Australia is easier to find!
Checking the cover itself is also imperative. How much medical cover do you get? What level of protection do you get for baggage and valuables? Is cancellation covered? What activities will you be covered for?
You might also want to consider a policy with different levels of excess on various sections. You could opt for travel insurance no cancellation excess, but with a small excess on claims for valuables, for example.
Reading the terms and conditions of any policy you're taking out is essential, as is noting the policy exclusions.
An alternative to no excess travel insurance
If you are an older traveller or have pre-existing medical conditions then you'll be considered a higher risk by insurers and you might find it more difficult to get an insurance policy. Medical conditions are a prime example of this and you may struggle to find no excess travel insurance that covers pre existing conditions.
All is not lost though and finding the best travel insurance with no excess and pre existing conditions coverage is possible if you take a different approach: excess insurance.
If you take out an excess insurance policy alongside your travel insurance you'll have a way to get your excess back once a claim is paid. This has the same effect as a no excess policy but could work out cheaper and is easier to source.
Whether you want an annual travel insurance no medical excess policy or one with no excess at all, if you opt for excess insurance, you won't have to pay a penny over your basic premiums in the long term.
The best way to calculate whether this is a cost-effective approach is by getting quotes for both options - standalone and combined excess and travel insurance - and comparing the premiums to see what works out cheaper.