January is traditionally the busiest month of the year for people booking holidays.

But according to GoCompare, millions of people are foregoing the full benefit of cancellation cover by not buying travel insurance at the same time as booking their trips.

Research by the comparison site reveals half of the holidaymakers who purchased their travel insurance through the site in July last year arranged their cover within a week of their holiday start date.

Some 9% arranged it on the actual day their holiday began.

Only a quarter (26%) of travel insurance policies purchased in January 2015 were for holidays with departure dates more than one month away, while 40% were for holidays starting within a week.

Cancellation cover starts as soon as you purchase the policy

Although medical cover and lost luggage are usually the key reasons holidaymakers take out travel insurance, most policies also provide valuable protection against events affecting you before you even leave your home. With single-trip policies, the cancellation cover starts as soon as you purchase the policy, not on your date of travel.

According to statistics from the Association of British Insurers (ABI), around 34% of travel insurance claims made by UK holidaymakers are for costs related to cancellations, with an average claim value of around £700.

Insurers will only consider claims if they are prompted by events travellers could not have known about before buying their insurance. Therefore, the sooner you buy your policy, the more likely you’ll be covered if something happens between booking your holiday and your departure date.

What does cancellation cover include?

Cancellation cover enables the holidaymaker to reclaim the costs of their holiday, up to the cover limit and minus any excess, should certain circumstances arise before taking the trip. These may include a serious illness or injury affecting someone in the travelling party or a close relative, such as a parent, child or sibling, who isn’t travelling but who they’d like to remain at home with.

A serious fire or flood at home may be another reason why people may need to cancel or postpone their holiday. Also, you cannot usually refuse to carry out jury service because of a holiday booking, but if you didn’t know about it before you arranged your insurance you may be able to reclaim some or all of the costs of cancelling or postponing your trip.

‘It’s a false economy to delay arranging travel insurance’

Alex Edwards, travel insurance spokesperson at Gocompare.com, said: “For many people their summer holiday is a major financial commitment, and having to cancel the trip for personal reasons could see them losing some or all of their holiday cost if they don’t have the benefit of cancellation cover provided by a good travel insurance policy.

“Even if it’s several months between booking your holiday and actually travelling, it’s wise to arrange your travel cover soon after you book your holiday rather than leaving it until just before you go. That way you’ll benefit from any cancellation cover provided by your policy as soon as you buy it, giving you several months of valuable cancellation protection in the lead up to your trip. It’s a false economy to delay arranging travel insurance.

“Although it’s a good idea to arrange your travel insurance very soon after booking your holiday, don’t immediately buy your holiday operator’s or travel agent’s packaged cover. It’s usually one of the most expensive ways to get travel insurance and you should be able to find a better value deal offering the cover you need by comparing policies online.”

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