A crucial “simple check” could save holidaymakers money and provide better protection for their belongings this summer, financial experts have advised.
Financial information firm Defaqto highlights that many may already possess overseas personal possessions cover within their existing home insurance, urging travellers to scrutinise the terms of both their home and travel policies.
This comes as many mistakenly believe only dedicated travel insurance offers protection for items taken abroad.
However, Defaqto’s analysis reveals that for those with personal possessions cover, a significant 95 per cent of home insurance products provide worldwide protection as standard for valuables and belongings taken outside the home. In many instances, these home policies can even boast higher single-item limits and potentially more favourable payouts compared to typical travel insurance offerings.
Despite this, Defaqto stresses that comprehensive travel insurance remains absolutely essential. It is indispensable for unforeseen medical emergencies, which can incur costs running into thousands of pounds, as well as for trip cancellations. Furthermore, travel policies frequently cover delayed baggage, enabling holidaymakers to purchase immediate necessities while awaiting their luggage.
Travellers should be aware that not all home insurance automatically extends to accidental damage for items away from home, and making a claim could impact future premiums or no-claims discounts for several years, Defaqto cautioned.
The key, according to the firm, lies in understanding the potential overlap between home and travel insurance should a claim become necessary. It advises checking how each insurance product defines “valuable items”.
Data from the star ratings company indicates that over 50 per cent of travel insurance products cap payouts at less than £350 per item. In contrast, home insurance policies frequently offer significantly higher single-item limits for valuables taken away from home, with £2,000 being the most common maximum, Defaqto noted.
Many policies also allow individuals to tailor these amounts to ensure adequate cover for their specific needs.
Defaqto also highlighted that the majority (81 per cent) of home insurance products include mobile phone cover as standard within personal possessions, and nearly eight in 10 (76 per cent) do not apply deductions for clothing wear and tear, irrespective of age.
The application of insurance excesses – the amount a customer contributes towards a claim – can also differ significantly, Defaqto explained.
Home insurance excesses are typically applied per incident, whereas some travel insurance policies may charge “per person, per section,” potentially leading to multiple excess charges. Nearly two-thirds (64 per cent) of travel insurance products analysed by Defaqto utilise this latter method. This analysis was conducted on 8 May.
Angela Pilley, an insurance expert at Defaqto, commented: “Many people may not realise that they already have or can get cover under their home insurance for personal possessions while away from home, including cover when travelling abroad. Before travelling, it’s worth checking both your home and travel insurance carefully to understand which product gives you the protection you actually need. Some home insurance products may offer higher limits for valuables and gadgets. Understanding single-item limits and excesses can make a huge difference if something goes wrong while you’re away.”
To help holidaymakers navigate their policies, Defaqto offers the following key suggestions:
- Verify existing cover for baggage and valuables through other insurance products.
- Ensure single-item limits adequately cover high-value items such as gadgets, jewellery, or designer goods.
- Familiarise yourself with how excesses operate, understanding the amount you would contribute to any claim.
- Confirm coverage for all countries on your itinerary and for the entire duration of your trip.
- Ascertain if accidental damage is included, particularly if you require protection against drops, spills, or breakages.
- Thoroughly check cover for mobile phones, tablets, and other electronic gadgets before departure.
