The difference between money and cash in travel insurance small print - are you covered?
While most travel insurance policies do include cover for some lost or stolen cash, often there are harsh limits which may not cover all of a holidaymaker's spending money.
And there is a difference between 'money' and 'cash', independent product assessment firm Defaqto warned.
Cash typically refers to physical currency - banknotes and coins - that you carry with you during your trip, while money encompasses a broader range of items beyond physical cash, such as credit and debit cards, traveler's cheques, prepaid travel cards and postal or money orders.
Defaqto found 91% of annual travel insurance policies and 86% of single-trip policies it analysed included cash cover as standard. But in many cases, the maximum payout may fall short of what some travellers carry with them:
- 35% of single-trip policies analysed covered only £200 to £299 in cash.
- Just 24% offered higher cash cover between £300 and £399.
- Only 2% of policies included emergency cash advances - which is when the insurer will provide people with emergency funds.
Travellers relying heavily on cash, for example, when visiting countries with limited card acceptance, could find themselves out of pocket if targeted by theft or pickpocketing.
Read more: What does good travel insurance include?
And with so few policies offering emergency cash advances, most travellers will need to rely on their own backup methods, such as access to online banking or a secondary card.
Anna-Marie Duthie, a travel insurance expert at Defaqto, said: "Travel insurance often distinguishes between 'money' and 'cash' and the definitions matter. Money might cover credit cards or traveller's cheques, whereas cash is notes and coins and they're often covered under separate limits."
Tips for protecting your holiday money
To reduce your risk and make sure you’re financially protected while away, you may wish to do some of the following:
Get travel insurance: Losing money on holiday is bad enough, but finding out you’re not covered can make it worse. Before you jet off, review your travel insurance policy, make a plan for managing your money abroad, and build in a back-up if things go wrong.
Read the policy small print: Understand how your insurer defines 'cash' and 'money' and what limits apply.
Use a mix of payment methods: Don’t rely solely on cash or one card. Having a debit card, a credit card, and even a pre-paid travel card offers flexibility and protection.
Store money separately: Keep backup cards or some cash in a different location from your main wallet, such as in a hotel safe or separate bag.
Freeze misplaced cards immediately: Use banking apps that allow you to freeze and unfreeze cards quickly.
Keep receipts for currency exchanges: You may need proof of withdrawal or exchange if you make a claim on travel insurance
Can your bank help?: If money is lost or stolen, check whether losses are recoverable through your bank or card provider first.
Choose a policy with higher cash limits: If you know you’ll be carrying more than £300 in cash, compare travel insurance policies that match your needs.
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