Travel insurance that lasts the distance

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Travel insurance is one of those purchases that many people would rather get over with quickly than study in any detail.This probably explains why most are content to buy through the travel agent or company arranging the holiday.

Many holiday discounts and special deals are dependent on you buying such insurance, but these policies are unlikely to be the most comprehensive available, and almost certainly not the cheapest. It is worth shopping around if you plan to participate in any unusual activities while you are away or have more than one holiday a year.

According to the Association of British Insurers, several million British holidaymakers fail to take out travel insurance. This is not wise, as services we take for granted at home, such as free hospital treatment, can be expensive abroad.

Everyone should get an E111 form from a post office. This entitles travellers to EC countries to benefit from the reciprocal health arrangements which exist between member countries. But private insurance will still be needed for fuller medical cover, as well as for loss of property, theft or legal expenses arising from accidents or disputes.

The E111 entitles holders to medical treatment in 17 European countries as well as 40 countries worldwide, including Australia and Hong Kong, but it does have restrictions. In France you will have to pay 25 per cent of treatment costs plus a daily charge. In Spain you will almost certainly be taken to a private hospital where the average cost of an operation is pounds 3,000 and the E111 is not valid.

Andrew Perolls, managing director of Bupa travel services, says: "In our experience, when people fall ill abroad they are asked to provide evidence of a travel insurance policy or private medical cover, not an E111."

Insurance broker Berry, Birch and Noble claims that three in 10 travellers will fall ill this year.Adviser Paul Harrison says: "Many people think of travel insurance as protection against the stolen camera, but such things pale into insignificance compared to mending a broken leg for pounds 4,000 in Europe and perhaps pounds 10,000 in the USA."

Which? magazine produced a useful guide to best-buys in travel insurance in its March issue, which should be available in many libraries. Since then, WorldCover Direct has launched the first policy to charge by the day and Direct Line is piloting its own low-cost policy.

Some travel insurances will allow you to select policy features, leaving out those you don't want. Eugene McCormack, head of sales at insurer Europ Assistance, says: "You can save a lot of money by cutting out what you do not need. If you have some baggage cover under house contents, why pay twice? Another example is cancellation cover. If you are travelling tomorrow, you are unlikely to need it."

Frequent travellers should consider annual policies, most of which allow individual trips to be 31 days long. Familiar names, including Direct Line, are joining the competitive annual policy market, many with options such as including business travel. For example, Barclays' single person annual policy with winter sports is priced at pounds 96, and Towry Law's new Premier Executive Travel policy costs pounds 105. However the latter allows individual trips of up to 60 days, and a partner can be added to the policy for pounds 35.

Europ Assistance quotes pounds 44.40 for a 14-day policy for one person (with basic medical and repatriation cover) going to the USA. A worldwide policy for a year compares well at pounds 64.35. A package with baggage and cancellation extras costs pounds 99.

Standard clauses in most insurance policies exclude injuries arising from being under the influence of drugs or drink - such as diving accidents in the hotel pool. People in high spirits have a greater tendency to take the plunge without checking the depth of the water. If you do not want to invalidate the cover you have bought, do look before you leap.

q Europ Assistance 01444 44 22 11; Berry, Birch and Noble 0800 318553; Bupa 0990 858585.