Do you ever wonder if travel insurance actually pays out, and if so, how much? We've dug into data from the Association of British Insurers (ABI) to learn about the most common types of travel insurance claims and the typical payout for each type.
Most Frequent Type of Travel Insurance Claim
Cancellation was the most common type of travel insurance claim in 2017. Of the 510,000 travel insurance claims that year, 34% or 174,000 claims related to Cancellation. There was a 9% increase in Cancellation claim from 2016, due in part to poor weather conditions around the globe and airline disruptions.
Medical claims were the next most frequent type of travel insurance claim, with holidaymakers submitting 159,000 claims for 2017. Finally, 86,000 claims were made for lost baggage or money.
Number of UK Travel Insurance Claims
|Type of Travel Insurance Claim||Number of Claims Paid|
|Lost Baggage or Money||86,000|
Average Travel Insurance Claim by Type
According to the data, the average travel insurance claim payout was around £755 in 2017. But reimbursement levels vary significantly depending on the type claim. For instance, medical-related travel insurance claims were the most costly by far, with holidaymakers receiving an average of nearly £1,300 per claim. In fact, medical claims typically cost 2X as much as non-medical claims. In part, this reflects the high cost of some medical claims, reaching tens of thousands of pounds or even more.
Average Travel Insurance Payouts
|Overall UK Claims Payouts||Average Cost per Claim|
|Lost Baggage or Money||£17,000,000||£198|
Claims amounts also vary by age. The average non-medical claim for budget-conscious millennials, who tend to spend less on trips than some other age groups, was only £261. As the youngest group, millennials would also be less prone to falling ill due to a medical condition during a holiday—so it's not surprising that their average medical claim was 36% less than average, or £812. Given UK household debt levels continue to rise, many households would not be well equipped to cover these losses without significant financial burden.
While many people seem most concerned with losing their luggage on a trip, the data shows that the true value of travel insurance lies in the financial protection afforded to emergency medical or Cancellation expenses. And while the average cost of travel insurance is £46 across all types of plans to cover a single trip, cheap plans can typically be found for as little as £10—and even the cheap plans offer millions of pounds of medical cover.
If you're in the market for travel insurance, see our article discussing some of the best travel insurance companies offering cheaper cover.