Insurance: only a fool travels without it

Travel insurance is a holiday essential many people overlook. Don't. For most people it costs less than £20 and often far less to get protection from the cost of last-minute cancellations, or emergency medical treatment. If you're still not convinced you need it, consider the cost of not having it. If your appendix was to burst while you were sipping cocktails in Europe you could face a £7,500 bill for an appendectomy. If the same happened in America, you could be faced with a bill of around £25,000. That £20 is starting to look pretty reasonable, isn't it?

So how do you get the best cover for the lowest price? The key is not just to opt for the insurance policy offered by your travel agent or airline. More often than not these are overpriced, and in some cases you don't get much for your money. Airlines are particularly bad on this score. An investigation by Which? Holiday found that British Airways and Ryanair both offered travel insurance that didn't meet Which? best-buy criteria regarding cancellation and curtailment, or lost or stolen baggage. And easyJet, Jet2 and Monarch all automatically add travel insurance as you book so if you're planning to shop around, then deselect it as you go through the booking process, or you'll end up doubling up your cover.

Comparison sites will help you find the best travel insurance for you. Try Moneysupermarket.com or Comparethemarket.com. But first of all, work out what you need. If you go away more than twice a year, an annual multi-trip policy will usually be more cost-effective than getting a new policy every time you travel. Multi-trip policies typically cover you for an unlimited number of trips a year, as long as no single trip lasts more than 31 days.

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The other thing to consider is what you will be doing on your trip. If you'll be taking part in any kind of extreme sports including scuba diving and skiing you need to make sure your insurance covers you for it. Even if you aren't going to be throwing yourself out of planes, down mountains or deep into the sea, don't just opt for the cheapest insurance. Some very cheap policies don't provide enough medical cover. As a rule, the minimum medical cover recommended is £1m if you are holidaying in Europe, rising to £2m if you are visiting America, where hospital costs are much higher.

If you're holidaying in Europe, also make sure you have an EHIC card. Formerly known as an E111, this entitles you to claim free or cut-price medical treatment in EU countries as well as Iceland, Liechtenstein and Norway. It's not an alternative to travel insurance. It only entitles you to the same level of state medical treatment as locals can get, which in some countries isn't much, and in a worst-case scenario it also won't cover you for repatriation getting back to the UK. But the card is free and will save you having to claim on your travel insurance and possibly pay an excess if you only have a minor ailment. You can get an EHIC card at the post office or online at Ehic.org.uk. Get one for each person travelling and keep it with you when abroad, as you need to show the card in order to get the treatment.