FT921-12799 _AN-CAXBAAD9FT 920124 FT 24 JAN 92 / Survey of FT Quarterly Review of Personal Finance (33): Premiums fall but vary widely - Travel insurance / One insured holidaymaker in every 15 eventually makes a claim on policies offered by 100 companies competing in a profitable market By RICHARD LAPPER THINGS CAN go wrong when you take a holiday abroad, and the expense, especially if you are unfortunate enough to need hospital treatment, may be considerable. One insured holidaymaker in 15 eventually makes a claim to recoup the cost of cancellation, lost luggage or medical treatment. Travel insurance is a classic example of what insurers call a 'commodity product'. According to Peter Friend, of Leslie & Godwin, the insurance broker, most policies are similar in character, offering cover for a standard range of risks: Cancellation or curtailment of a holiday; Loss of luggage (usually covered for between Pounds 1,000 and Pounds 1,500) and money (Pounds 250 to Pounds 800). Medical costs: (typically, cover of up to Pounds 250,000 in Europe, and Pounds 1m in the US where treatment can be very expensive, though some policies offer higher limits). Other clauses provide compensation in the event of an accident, and also cover any legal expenses that might be incurred. Terms are often comparable. Excesses (the amount that the policyholder must bear of any claim) of Pounds 25 apply in most cases. However, conditions can differ sharply, according to the type of holiday. The cover for losses arising from the cancellation or curtailment of a holiday varies from about Pounds 1,000 to Pounds 5,000, for example. But although premiums have fallen in the past few years, as more insurers have competed for what has traditionally been reasonably profitable business, rates for exactly the same policy can vary markedly among the 100 or so companies in the market. According to Which?, the magazine of the Consumers' Association, which published an extensive review of the market last February, cover for a family holiday in the US can cost as much as Pounds 158 or as little as Pounds 94.20. A survey conducted by Leslie & Godwin also shows wide variations. Lunn Poly, the tour operator, charges holidaymakers Pounds 20.90 for seven-days' cover for a European holiday; while Masseys, the broker, which markets a policy underwritten at Lloyd's of London, charges only Pounds 13.50. Most companies rate premiums in three geographical bands: travel outside Europe is the most expensive, Europe is cheaper, and the UK cheaper still. Premiums vary according to the number of days' cover, and are also affected by the amount of commission earned by the retailers - banks, travel agents and tour operators. Tour operators sometimes charge higher commissions; in some cases they also provide special packages. Wallace Arnold provides special rates for family groups, while Lunn Poly offers discounts for pensioners. People who take holidays where the risk of injury is higher, such as skiers, must usually pay higher rates. Winter-sports packages also provide snow guarantees, which compensate skiers if there is insufficient snow on the ground, and also cover losses arising from rock damage to equipment. Holidaymakers should be aware of exclusion clauses, paragraphs in fine print which spell out circumstances under which cover is not valid. Off-piste skiing is sometimes not covered. More generally, holiday insurance policies rarely provide cover if you are travelling against medical advice, or for anything that happens while you are under the influence of drink or drugs. And policyholders should be aware that cover for loss of property, such as jewellery, cameras and expensive watches, can be limited. In some cases, it may be advisable to extend your home-contents policy. Travel by car can mean extra requirements that are not met by standard travel cover - such as the cost of repairing your car, or of hiring a replacement. So you may need to extend your motor insurance, too. Companies can supply you with a Green Card, which is internationally recognised proof that you are covered. Which? warns: 'You can drive without a Green Card in EC countries, but cover is then limited to the legal minimum for that country.' The magazine lists more than two dozen companies that provide good coverage relatively cheaply for holidays in the UK, Europe, the US and worldwide. Its list of 'best buys' covers four categories of holiday: those where no special requirements are involved, 'family holidays', trips taken by the 'retired or elderly', and those where 'higher levels of cover' than those provided on standard forms are required. In turn, rates for each type of holiday are cited for four destinations: the UK, Europe, US and worldwide. Specialist brokers Crispin Spears and Lloyds Bank, which sells a policy underwritten by Commercial Union, get most mentions. Crispin Spears is particularly competitive in the UK, while Lloyds provides best value for most holidays outside Europe. Brokers Frizzell and MKC also figure prominently. Crispin Spears' popular Annual Protection Plan is particularly suitable for business travellers who make frequent trips to Europe or farther afield. It covers any number of trips each year. Guy Ireland, of Crispin, says the cost varies, from Pounds 80 a year for Europe, Pounds 100 for the US and Pounds 120 for a full international cover. The policy is particularly appropriate for people who have second homes in France or elsewhere in Europe, he says. Finally, holidaymakers may find they have some level of automatic cover when tickets are bought with a credit card. Most ordinary cards simply provide basic personal accident cover, but some gold cards provide extensive cover. The Financial Times London Page XXXI Photograph Those who live dangerously pay more (Omitted).