Brexit, EHIC and European Travel Insurance

The recent UK referendum resulted in a decision to withdraw from the European Union and that is raising the spectre of higher holiday costs and also the very real possibility that full European travel insurance will be required by all regular travellers to EU destinations.

The Position Summarised
At the time of writing, the full implications of the UK’s vote to leave the European Union are far from clear.

It seems safe to assume that little will change immediately other than the perhaps predictable nervous reactions of the stock and currency markets. That latter one may hit your holiday purchasing power hard, particularly if you’re heading off to North America, and as much of the buying and selling of holiday components (such as aircraft charters) is done in dollars, expect to see a painful impact on overall holiday costs too.

Of course, these things may well stabilise.

Many people alive today travelled extensively on holiday or business (or both) before the European Union existed. Ultimately, there are millions of people in the UK who want to travel - and that is a VERY significant buying-clout and profitable segment for airlines and overseas tourist destinations around the EU. Competition will remain fierce and the rush to deliver eye-catching deals to the market will continue.

The Broader Perspective

While the immediate perturbations will continue to make headline news, they will in all likelihood subside over time. The media will get bored with the subject and move on, and markets will find their natural levels.

What is slightly more concerning, though, is how in the medium to long term, things we all currently take for granted may well need to change. One of those is the much-loved EHIC (European Health Insurance Card) and the related basic European travel insurance.

EHIC is the system whereby EU member states agree to treat each other’s citizens in the event of a medical emergency. Any traveller requiring such help will receive the same treatment as a citizen of the country they’re visiting. That’s not to say necessarily 100% free, but huge medical emergency bills are much reduced.

The wise traveller will always have supplemented that basic provision by taking out European travel insurance to cover those costs NOT considered to be a medical emergency, such as air ambulance back home or additional hotel bills for a family member etc.

Now here’s the tricky part – at the moment, the cost of European travel insurance to the EU is based upon the assumption that much of the cost of any medical emergency would be met by EHIC. The EHIC system only applies to citizens of EU member states - so, you can see the potential problem!

This might affect travellers seriously by pushing up the cost of their travel insurance by some non-trivial amounts.

What’s Likely?

Right now, nobody really knows what will happen to EHIC.

It may be continued in a different form, which seems the most likely course of action. It’s possible it will be scrapped altogether and travellers will need to be absolutely certain that they have full travel insurance covering emergency medical treatment, just as happens now when visiting the USA.

What is certain, though, is that once the dust settles and the UK finally starts to leave the EU, then things in this area will change and the need for comprehensive but affordable European travel insurance will increase.

Patrick Chong is the Managing Director of InsureMore, an award-winning team of specialists in worldwide and European travel insurance policies. Besides offering great deals on travel insurance, Patrick also collects and shares the best free travel competitions to help his clients get the most out of their holidays.