Only 35% of travel policy claims are settled in full, according to research from Sainsbury's Bank.
The research found that one in three people have had a disaster when on holiday abroad, with 11% claiming they needed medical treatment.
However only 11% of these claims were partly settled and 7% were turned down. A further 18% of people suffered a holiday disaster but could not claim because they had no insurance, it found.
Sainsbury's Bank travel insurance manager, Robert O'May, said: "When buying travel insurance, it is worth remembering that you don't necessarily have to pay extra for a more comprehensive range of benefits.
"For example, independent research by Direct Excellence revealed that our annual travel policy is the only one to appear in the top ten for both premiums and quality of cover."
