Holiday-makers in the UK are paying about £630m too much for their travel insurance annually by purchasing the wrong insurance, new research shows.
A survey of over 1,000 Brits by travel insurer Columbus Direct found many are losing money by buying multiple single-trip policies a year, instead of investing in an annual multi-trip policy.
Brit said they spend about £53 on three single-trip insurance policies a year. But an annual multi-trip policy could cost just them as little as £26.15 to insure all three trips – saving £26.85.
With 44% of – or 23 million – Brits buying travel insurance in the last year, this comes to £630m.
Despite consumers correctly identifying that annual policies are usually more cost effective if you go on two or more holidays a year, only 16% of consumers said they buy one annually.
When asked why, more than a quarter (28%) of consumers say they don’t like committing to an annual multi-trip policy in case future holidays need specialist insurance, such as skiing or backpacking.
A quarter (26%) said they just choose the cheapest option available – a single trip policy.
And almost a quarter (22%) admitted they book last minute so just pick the quickest option.
Shockingly, one in 10 (11%) also admitted they mistakenly thought buying an annual multi-trip policy means you must holiday in the same country all year.
However, it’s not just those who purchase multiple single-trip policies who fork out on travel insurance.
A fifth (19%) of people bought an annual multi-trip policy, spending £65 on average, but only took one trip. They could have saved £51.83 by purchasing a single-trip policy, the insurer’s figures show.
The best way to prevent overspending is to plan your trips for the year, then compare the cost of multiple policies with one annual one, Columbus Direct advised.
For example, for a European beach holiday, then a winter ski trip in winter, two single-trip policies will likely be best, since skiing requires a specialist policy that comes with cover for the specific risks.
And if you know you’re only going on one trip over a twelve-month period, buying a single-trip policy is almost always best and will be the cheaper option.
But for multiple trips that don’t require any specialist cover – a couple of city breaks and a beach holiday, for example – an annual policy can help you save a lot.
“Spontaneous trips and a desire for short-term savings mean many of us buy the cheapest travel insurance available just before we jet off, Stuart Lloyd, travel insurance expert at Columbus Direct, said.
“While we feel good that we’re covered, the reality is this behaviour means many holidaymakers end up paying double what they should.
“The most important thing is to make sure you’ve got the right level of cover for each holiday, then you can look at comparing price.”