One solution, especially for frequent travellers, is the annual policy, which is growing in popularity. One of the largest players in the market, Home & Overseas, predicts that annual policies - which at present account for about 5 per cent of the market - will eventually have 50 per cent.
More Britons are taking their holidays overseas and more are making weekend or spontaneous visits abroad. Possession of annual cover allows them to take spur-of-the-moment trips and saves the cost of the policies that holiday vendors like to try to add on to their packages.
They can also often save even if they only take one big holiday a year - Home & Overseas' annual policy, Safeguard, which is available through several small, independent travel agents - costs pounds 139 for a family, less than the pounds 148.50 cost of two weeks' cover for two adults and two children in the US.
Abbey National launched its first annual policy in February. It is available only by mail but the bank is considering selling it through branches later this summer.
General Accident is also trying to push annual policies. All the insurers expect that closer links to Europe - notably the Channel tunnel - will increase demand for annual cover.
Strictly speaking, medical insurance is not essential for travel within the European Community, as reciprocal arrangements have been negotiated between the 12 states.
By completing the Department of Health form E111, available at post offices, travellers become eligible for basic medical treatment within the EC. In some countries it will be free, in others it will involve paying at the time and claiming reimbursement afterwards. (People who do not complete E111 before going abroad will still be eligible for medical treatment but will find that the red tape is far more complicated, and that they are more likely to have to pay up front).
However, Martin Mills of Home & Overseas says that the standards of care under E111 are often far from luxurious: 'In Portugal it's very basic. There are no nurses, no one to give you a bedpan. Your relatives are expected to do that.'
Every year about 12 million Britons travel abroad. An estimated 2 million travel without any form of insurance. Of those who do take out insurance and who find themselves lodging a claim, about half will not have gone abroad at all. According to the Association of British Insurers, about 50 per cent of holiday claims are for compensation for holidays that could not be taken because of illness, the death of a relative or redundancy. Another 25 per cent relate to loss of or damage to baggage. Most of the other claims are for medical treatment. 'We do tend to look the other way when crossing the road,' a spokeswoman for the ABI said.
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