Travel insurance simplified- the basics and what you need to know

Travel insurance is an absolute necessity when you go on holiday to make sure you are protected if the worst happens. But rather than simply take out the cover offered by the travel agent, you might be able to save yourself a lot of money if you shop around.

The idea of taking out travel insurance might seem a bit daunting but in reality, comparing policies is very simple. Below is a guide to travel insurance simplified, giving you an idea of what things to look out for when you arrange your cover.

Firstly, it is possible to either arrange insurance every time you go on holiday or alternatively, if you travel frequently, it may work out more cost-effective (not to mention quicker) if you take out an annual policy. Both are available on either a Europe or world-wide basis but check to see which countries are included.

Every policy has a limit on how much it will pay out. You need to think about how much cover you need. Medical costs tend to have a standard limit but things such as luggage are more personal. If you think the sum is not sufficient to cover your belongings, you can arrange to increase it, for a higher premium.

Also check the excess on the policy. This is the amount you have to pay out of any loss that occurs. A provider that seems particularly cheap compared to others may have a far higher excess on their cover. Whilst this is a good way to reduce the premium, if you can't afford to pay the excess if the worst occurs, it is a false economy.

Finally, read through the fine print to check what is excluded. If you plan on sitting on a beach for two weeks and not moving you will probably be OK but if you were hoping to try out some activities such as kayaking, bungee jumping or even skiing, you will not necessarily be covered.

Arranging your own travel cover is not as difficult as it sounds, and it means you will have more money to spend on holiday!