Skip to content

7 things to look out for when buying travel insurance, according to an expert

June 04, 2022
5 min read
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

If, as it's said, taking a vacation without travel insurance is like leaving the house without an umbrella, then taking one with the wrong insurance is like going out holding a plastic bag above your head.

Your hair might stay dry, but you’re still getting wet. And that dry-cleaning bill won’t pay for itself.

For more news delivered each morning to your inbox, sign up for TPG's daily newsletter.

But the bill for a vacation disaster can run into the thousands.

Which is to say, when it comes to travel insurance — if you’re not covered by complimentary travel insurance on your credit card — you need to buy smart. We spoke to travel insurance specialist Michael Pettifer, managing director of MPI Brokers, for some tips on how to stay dry when unforeseen bills rain down.

Book your travel insurance when you book your trip

“It may well be that the name is misleading,” said Pettifer. “'Travel insurance' suggests it is only for traveling. Whereas 30% of claims are by people who haven’t even left. Perhaps they got sick or injured and couldn’t go. I always say you must have travel insurance from the date of booking to the date of return."

He added: “COVID-19 not only laid bare the deficiencies of some of the policies out there, but it also laid bare consumers’ misunderstanding of what travel insurance is. And they’ve finally come to the realization that you need to book your travel insurance for when you’ve booked your trip. Not a few days before you travel.”

Cancellations caused by government action

“This, of course, is another issue COVID-19 brought sharply into focus,” Pettifer said. “The pandemic did not cause claims for cancellations. COVID-19 was the proximate cause. What caused the claims was the government shutting down air travel. In many policies, that wasn’t covered.

“In some cases, like at MPI, policies did cover it and insurers began paying out, until they decided not to. So we’re taking action because of that.”

Sign up for our daily newsletter

Check the insurance rules in the country you’re going to

“During the pandemic, many destinations found vacationgoers arriving with no travel insurance at all,” explained Pettifer. “Then they got COVID-19. Some ended up in hospital where the money racked up, only to find they hadn’t got the insurance to pay for it. That cost states money they didn’t want to pay.

“So now, we are finding more and more destinations are obliging airlines to check people have travel insurance. So you could get to the check-in and be asked to produce your travel insurance document. Well, if you haven’t got one, you won’t be allowed on the plane.

“That’s a new thing, and it is happening a lot.”

Related: TPG's comprehensive guide to independent travel insurance — including coronavirus coverage

Ensure the full cost of your holiday

“This is something else COVID-19 has laid bare: In the cancellation section, we’ve noticed people underinsuring by mistake,” Pettifer said. “They buy a policy with, say, 3,000 pounds (about $3,760), but their holiday cost is closer to 6,000 pounds (about $7,520). Then their flights are canceled, and they lose a lot of money because they didn’t compare the sum insured in the cancellation section with the cost of their holiday.”

He added: “It is even feasible that an insurer could say, ‘Well, you underinsured your holiday and that is a material fact, so we’re not paying anything.'”

Related: When to buy travel insurance vs. when to rely on credit card protections

Personal liability is key

“This, effectively, covers bumping into other people, whether that’s in a car or on a ski slope,” he continued. “Underinsuring for causing injury to a third party is one of the most costly insurance mistakes there is.

Related: Things go wrong on your flight? Here's what to ask for

“Ideally, one should be aiming for the maximum limit of indemnity. We give 5 million pounds ($6.3 million) in normal circumstances, while I think some of our carriers are giving 2 million pounds ($2.5 million). That should be enough unless you ski into an American lawyer in America. That’s when you can be in big trouble.”

Does your third-party liability cover travel companions?

“It’s also quite common for there to be an exclusion for any claim brought against the person who caused the injury if that person is on holiday with you,” said Pettifer. “In other words, if your traveling companion brings a claim against you, then it’s excluded under the policy.

“And let’s face it, the most likely person you’re going to ski into is your mate.”

Bags get lost

“It can be a real pain filing a claim for lost baggage,” Pettifer shared. “You have to prove you lost it, you have to prove you owned it, and what it cost. And if the airline loses it you’ve got to report it to the airline at the airport immediately and get a Property Irregularity Report. And often the airline is responsible so you’ll get some money from the airline and the balance comes from your insurance.”

Bottom line

Travel insurance can be confusing and may seem like an overly time-consuming piece of administration you don’t need before a big trip. However, it’s more essential than ever. When it comes to the best policies, you get what you pay for. The less you pay, the less you will be covered if the worst does happen.

When booking travel insurance, make sure you read the fine print and ask questions to ensure you’re covered for all eventualities. And don’t leave it until the last second!

Featured image by (Photo by Prostock-studio/Shutterstock)
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Top offers from our partners

How we chose these cards

Our points-obsessed staff uses a plethora of credit cards on a daily basis. If anyone on our team wouldn’t recommend it to a friend or a family member, we wouldn’t recommend it on The Points Guy either. Our opinions are our own, and have not been reviewed, approved, or endorsed by our advertising partners.
See all best card offers

TPG featured card

Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards

2 - 10X points
10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day

Intro offer

75,000 bonus miles
Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

Annual Fee

$395

Recommended Credit

740-850
Excellent
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,300+ lounges, including Capital One Lounges and the Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023
Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day
  • Intro Offer
    Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

    75,000 bonus miles
  • Annual Fee

    $395
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    740-850
    Excellent

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,300+ lounges, including Capital One Lounges and the Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023