When you're booking a holiday, travel insurance is often the last thing on the list — and picking the cheapest option feels like the obvious move. But the gap between a £6 policy and a £20 policy can be enormous when something goes wrong.
Here's what to consider before you automatically sort by price and click "buy."
What Makes Cheap Policies So Cheap?
Budget travel insurance policies cut costs by reducing cover in key areas:
- Low medical cover — Some offer just £1 million. In the USA a single hospital stay can exceed that.
- High excess — £250–£500 per claim means you're paying the first chunk out of pocket
- Low cancellation limits — £500 or less won't cover most package holidays
- Minimal baggage cover — £500 total with £100 single-item limits means your phone isn't really covered
- No 24-hour emergency line — Some budget policies only offer email support
The Real Cost of Under-Insurance
Consider this scenario: You break your ankle on a US trip. The bill:
- A&E visit and X-ray — $3,500
- Orthopaedic consultation — $1,800
- Surgery — $25,000
- Post-op stay (2 nights) — $8,000
- Medical repatriation flight — $15,000
Total: ~$53,300 (£42,000+)
A cheap policy with £1 million medical cover would technically pay — but one with only £500k wouldn't. And if the policy's excess is £500, you're paying that before anything kicks in.
"The best travel insurance isn't the cheapest or the most expensive. It's the one that gives you comprehensive cover at a fair price for your specific trip."
Key Cover Levels to Compare
When comparing policies, focus on these numbers — not just the headline premium:
- Medical expenses — £5 million+ for worldwide; £2 million+ for Europe
- Cancellation — Match this to your total trip cost
- Baggage — £1,500+ overall; £300+ single-item limit if you carry electronics
- Excess — Lower is better; £0–£100 is ideal
- Personal liability — £1 million minimum
- Repatriation — Should be "full cost" or unlimited
When Cheap Insurance Is Fine
Budget cover can be perfectly adequate in some situations:
- Short weekend breaks in Europe where you have a GHIC
- Trips with no expensive hotel bookings to cancel
- Travelling light with no valuables
- Young, healthy travellers with no pre-existing conditions
Even then, check the medical cover is at least £2 million and there's a proper 24/7 helpline.
How to Find Genuine Value
- Set a minimum standard — Decide your minimum cover levels first, then compare prices
- Compare like for like — Use excess-adjusted comparisons, not just headline premiums
- Read the policy summary — Every policy has a one-page summary. Read it before you buy.
- Check the insurer's claims reputation — Trustpilot and Defaqto ratings can reveal whether they actually pay out
- Consider the trip cost — If you're spending £4,000 on a holiday, saving £10 on insurance is a false economy
The Bottom Line
Buying the cheapest policy isn't "saving money" — it's reducing protection. The best approach is to understand what you need, set minimum acceptable cover levels, and then find the best-priced policy that meets those standards. That's real value.