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Travel Insurance

Travel insurance is the best way to protect you against financial loss and you need to buy it for the same reason you purchase any insurance policy: to cover you when things go wrong.

Not every country has a free health service and you could find yourself facing a hefty bill if you fall ill abroad. Then there are the problems which are not life-threatening but still stressful; lost luggage, cancelled flights and so on. The bottom line is it makes sense to take out an insurance policy unless you're prepared to find yourself out-of-pocket as a result of any holiday mishaps.

Always buy travel insurance directly from an insurance company or agent; if you buy it from a cruise line, airline, or tour operator that goes out of business, you probably will not be covered for the agency or operator's default. Before you make any purchase, review your existing health and homeowner's policies to find out whether they cover expenses incurred while traveling.

Your travel insurance policy should cover:

  1. medical expenses
  2. personal liability
  3. cancellation and curtailment
  4. loss of baggage and theft.

The 2 most important parts of the cover are the medical expenses to cover the cost of any emergency medical treatment you may require and personal liability; this covers you in the event that you're faced with a bill for any damage or injury you cause to anyone else or their property while abroad. should also have cover to pay out a lump sum if you're injured or if you die while abroad. The amount of insurance for each of these categories obviously differs from policy to policy, generally the cheaper the policy, the lower the cover. Some insurance policies offer a range of value-added services, such as replacement vehicles, house-watching and so on. It may also be worthwhile choosing an insurance policy which offers an international helpline, especially if you are going to a country where English is not readily spoken.

When you plan on driving abroad, check with your car insurer about just how much protection your existing policy provides. At the very least you will likely need a green card, which is proof in Europe that you are insured.

Car InsuranceYou should also consider an international roadside assistance policy. A travel insurance policy will not cover you when driving abroad. If necessary you will have to arrange extra cover through your existing car insurer. If you are a frequent international traveler, making 2 trips a year or more you will probably be better off arranging an annual travel insurance contract rather than cover for each journey. These policies generally allow unlimited trips as long as no one trip exceeds 90 days. But check the cover, some annual contracts will not insure you for winter sports, for example, so if one of your trips is to the ski slopes, you may still be better served by dedicated policies. And if you are planning a long trip off the beaten tourist path, you will probably need specialist help.

Statistically, you are far more likely to have an accident skiing, or indulging in some other hazardous sport, than you are sitting on a beach reading a book. This is why most basic travel insurance policies exclude hazardous pursuits. You should make sure you are covered, for example, for mountain rescue costs (if you need to be brought off the mountain); the cost of prepaid expenses such as ski pass and skis; and expenses incurred as a result of delays caused by avalanches in addition to the standard travel cover.

Credit cardholders paying for holidays or air tickets with their plastic may be eligible for free insurance. Standard cards protection may be limited but many gold cards provide comprehensive travel insurance. If your household insurance policy is arranged on an 'all-risks' basis, it means your possessions are also insured outside the home. Are you traveling on your own or with your family or as part of a group? If you are buying insurance for more than one person, a joint policy is likely to work out cheaper than separate policies for each individual. The kind of cover you will be looking for will depend on how much cover you already have.

Your possessions may already be covered through an all risks clause on your home insurance policy and your actual traveling costs may be covered by insurance through your credit card (assuming you used it to purchase the holiday tickets).Loss of Luggage

When you buy travel insurance be sure to find out details of coverage. There are some dangers you might face while on holiday which will not be covered by any travel insurance policy. These include detention or confiscation of belongings by Customs or any other government officials. You will also find that nobody will cover you against the risk of radioactive contamination. You may feel that both of these possibilities are remote enough not to worry about.

However, there are more prosaic dangers that may be equally expensive and life threatening in that order: no travel insurance policy will cover you against losses as a result of exchange rate movements or against HIV infection or AIDS.

Traveling abroad you should remember to take your passport and tickets, together with any visas or entry permits and, where necessary, vaccination certificates. You should also have a copy of your travel insurance policy with you. If you're taking your own car abroad or are likely to be hiring a vehicle you should also have an International Drivers License and your motor insurance certificate green card. If you are taking your own car you should also have a copy of your car registration document.