Similar to a car or home insurance policy, your travel insurance may also have an excess.
An excess is the agreed amount of money you will pay towards a claim on a travel insurance policy and can be referred to as a ‘deductible’. Once the excess has been settled your travel insurance provider will then pay the remaining expenses up to the limit of cover. For example, if you submit a claim for £400 and your excess is £100 then the claim payment will be £300.
Who has to pay an excess?
When making a claim the excess is generally per person unless stated otherwise in your policy wording. You may also find with some travel insurance policies the excess will need to be paid per section and per incident too.
For example, if you lose your jacket with your wallet in it, your claim would be divided into two parts, one under the Personal Possessions section of the policy for the jacket and wallet, and another under the Money section for any cash that might have been in your wallet. One incident, but two sections of the policy involved
Will an excess affect my insurance premium?
When purchasing your travel insurance, we advise you to do your research when it comes to selecting a policy with an excess. Although the cheapest policy may be more appealing, in the event of a claim you could be paying double, even triple the premium in excess costs!
For example, if the cost of the holiday is £450 per person and the excess is set at £250 per person and four people insured on the policy claimed for cancellation, the total claim would be £1800 with an excess to pay of £1000 meaning the claim payment would only be £800. However, if your excess was £100 per person, the claim payment would be a more satisfying £1400.
Granted a policy with lower or no excess may have a higher premium, but spending a few extra pounds now (roughly the equivalent of a round of drinks at the airport) could save you money should the worst happen.
What happens when an additional excess is applied?
Finding the right travel insurance when you have medical conditions can be time consuming and costly. In order to keep the price low, many travel insurance companies will implement a medical excess to be paid in the event of a claim – rather than charging you for a medical condition that is well controlled.
It is important to note any claim related to existing medical conditions, be it cancellation, curtailment or medical treatment, will require the medical excess to be paid – regardless of excess waivers or £0 excess policies.
What is an excess waiver?
Travel insurance is there to protect you from financial loss should the worst happen, but with some excesses set in the hundreds it can be more cost effective to pay the expenses yourself rather than making a claim on your travel insurance.
With this in mind, many policies offer an excess waiver for those who would prefer to pay no excess. For a small additional premium, the policy excess can be set to £0 – giving you peace of mind should you find yourself needing to make a claim on your insurance.
Beware, the cost of an excess waiver is usually per person, therefore, it may be more cost effective to purchase a policy with no excess rather than applying an excess waiver – something worth remembering when purchasing your travel insurance!
How does an excess affect my claims?
Depending on the travel insurer, you will either be required to pay the relevant excess before a claim is paid out or the excess will be deducted from the amount and the remainder paid by the insurer.
In some cases, a travel insurance claim can be rejected due to the excess not being paid so it is worth checking your policy wording to ensure you are aware of when to pay your excess.
Although we have mentioned several providers, please make sure you check the policy wording carefully to ensure the cover is suitable for your individual needs.
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