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Whenever you make a claim on an insurance policy, such as travel, car, home or pet cover, the payment you receive will have an amount deducted by the insurer. This is known as the excess.
It is possible to get travel insurance with no excess, meaning you receive the full amount of any claim you make. Find out more about what this means below, and the effect it could have on your premium.
What is a travel insurance excess?
Travel insurance policies apply an excess on claims they pay out. The excess is the amount deducted from the pay-out. It could be £50, £100 or £150, depending on the policy.
For example, if you claimed £300 for lost baggage on a policy with a £50 excess, you would receive a payment of £250 from your insurer.
Excess amounts tend to vary for different sections of the same policy. The excess on medical claims might be £200 for example, while the excess for claims for lost baggage, or cash, might be £50.
What is travel insurance with no excess?
You can choose to take a travel insurance policy with no excess on claims. However, this means paying a fee known as an excess waiver, the cost of which is added onto your insurance premium.
But, while your travel insurance policy will be more expensive, you will be safe in the knowledge you’ll receive 100% of any successful claim.
Not all travel insurers offer an excess waiver option, however. If you want to avoid an excess, you’ll need to seek out policies where the option is available.
It is also important to note that, even with an excess waiver intact, there could still be an excess applied for certain types of claim.
Anna-Marie Duthie, travel insurance expert at financial data company Defaqto, explains: “On occasion certain sections or types of claims can be excluded from an excess waiver such as a medical claim relating to an incident whilst undertaking a sporting activity, or a medical claim relating to a pre-existing medical condition. It’s therefore important to check the provider’s terms if you are thinking of buying the waiver.”
Compulsory and voluntary excess
There are two types of insurance excess: compulsory (sometimes referred to as ‘mandatory’) and voluntary. But, when it comes to travel insurance, only a compulsory excess applies (there will be no voluntary excess option).
When buying travel insurance, you will often get to decide the amount of the compulsory excess. Generally the higher it is set, the lower the premium, and vice versa. There will be limits on how high or low you can set the compulsory excess.
A compulsory excess is applied by the insurer and is not optional. If you need to claim on the policy you will have to pay the compulsory excess to cover that portion of the claim. The compulsory excess will be clearly laid out in the terms of the policy.
Will more than one excess be applied on combined claims?
Most travel insurers apply a separate excess for different types of claim, under different sections of the policy. This means you are likely to pay multiple excesses if you make more than one claim under those different sections.
And, where the travel insurance is a joint or family policy, there will usually be a per-person excess on any claim. This is different from, say, a car insurance policy, where the excess is only charged once for each claim.
For example, if you fell ill on holiday and required emergency medical care, which also meant you had to cancel pre-booked excursions (covered under your policy), you might have to pay the excess for each separate claim.
This could mean a £150 excess on your medical claim and then another £150 on your excursion cancellation claim, for example.
Likewise, if four members of your family insured on the same travel policy all needed to claim for a cancelled trip, there could be four separate excesses to pay.
In some cases the insurer will apply a maximum excess payment cap, such as two excesses per claim or a total maximum amount paid. This can be useful where claims are made for multiple members of a family all on the same policy.
Different insurers structure and apply their excess in different ways so check the terms and conditions to be clear how the claims process and excess will work.
How much does travel cover with no excess cost?
If you want to avoid paying an excess, bear in mind it can be costly to add an excess waiver to your travel cover. For example, we searched for single trip cover for two weeks for a family of four (with no pre-existing medical conditions) going to Spain, with Admiral Insurance.
The premium quoted was around £50 for a policy with a £100 excess per person per claim. In this case the excess waiver charge was just over £42, nearly doubling the cost to £92.
For the same family taking out annual multi-trip travel cover (for worldwide travel including the USA) the premium would be £115. This is also for a policy with a £100 excess per person per claim. But by adding an excess waiver, the total cost increased to around £207.
Pros and cons of travel insurance with no excess
Advantages
- You’ll get 100% of the payout of any successful claim
- No risk of paying multiple excesses if you have to make more than one claim on the same policy.
Disadvantages
- Excess waivers are likely to be expensive (it could double the cost of cover, depending on your circumstances)
- If you don’t need to claim on your insurance you have paid more than you needed for the cover
- Even with an excess waiver, some specific types of claim may still require you to pay an excess (check with your insurer)
- Not all insurers offer an excess waiver, so your choice of policies may be more limited.
How to find competitive travel insurance
To search for the right travel insurance cover for your needs at a competitive price it’s important to compare policies.
Cheapest isn’t always best and you should aim to read the terms and conditions of cover, including any exclusions and the excess applied on claims. This way you’ll know exactly what you’re paying for and can avoid any nasty surprises should you have to claim on the policy.
You can search for single trip cover and annual multi-trip policies, for individuals, couples and families through our comparison journey.
Frequently Asked Questions (FAQs)
Is it better to have travel cover with no excess?
Having travel insurance with no excess could prove to be highly valuable if you have to make a claim, particularly if it is a couple or family policy where the excess is applied per person.
It could save you hundreds of pounds on a claim in this instance.
However, paying for an excess waiver, to remove any excess from the policy, is likely to cost a lot more. In some cases it could double the premium you pay.
When do I pay the excess if I make a travel insurance claim?
Typically the insurer will deduct the excess from your successful insurance payout.
So if your claim was for £500 and the excess was £100, you’d receive a £400 payment.
What should my travel insurance cover?
It is important to ensure you have adequate medical cover when travelling abroad. This is particularly true if you are visiting the United States or Canada, for example, where medical costs are notoriously high.
Insurance experts tend to recommend you have insurance with at least £2 million in medical and repatriation cover, for example.
On top of this you may want cover for cancellation of your trip (ensure the maximum cover on the policy is enough for the amount you have spent on your holiday) and also cover for baggage, belongings and cash.
Always check cover levels, and terms, conditions and exclusions, as well as the excess you’d have to pay on a claim, when comparing different travel policies.
