What travel cover should I get?(Image: Larry Macdougal - PA)

If you're unlucky enough to have an accident or fall ill while you're abroad it could end up costing you tens of thousands of pounds if you're not properly insured. That's why a comprehensive travel insurance policy is essential whenever you travel.

It's not just the risk of losing your suitcase at Heathrow. Thousands of travellers fall sick or have an accident while they're abroad and being many miles from home and under-insured is a scary prospect.

But beware, because all policies are not the same and for the sake of saving a few pounds you could find yourself in an emergency and under-insured if you fail to read the small print and take the time to buy a suitable policy for you.

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So what should it cover?
A good policy should cover medical bills of at least £2 million in Europe and £5 million for the rest of the world. And it should pay out between £3,000 and £5,000 if you have to cancel or curtail your trip, for example because of illness or a fire or burglary at home.

You should also have at least £1,500 of cover for loss or theft of belongings. If you have specialist camera or golf equipment you'll need more than this and will probably be better off talking to your home contents insurer about additional cover. The policy should also offer you help if your flight is delayed.

Personal liability cover, typically up to £12 million, protects you if a damages claim is made against you while on holiday, while legal expenses cover (usually up to £25,000) pays for a lawyer if you need to make a claim against a third party. Both are essential elements of a comprehensive policy.

If you have an existing medical condition you must tell the insurer, because if you claim on the policy insurance underwriters will ask your GP for your medical records. If you fail to declare a relevant condition your claim is likely to be rejected.

You may be best off asking a broker to find a suitable policy for you. They can scour the market for a competitive deal and also help with any claim you may end up making, by arguing your case with the insurer if there's a dispute. To find a broker go to biba.org.uk.

Carry the European Health Insurance Card, which replaced form E111 in January 2006, as well because it offers free or reduced-price hospital treatment across Europe. But you need both the EHIC and insurance to be fully covered.

Related links
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MSN Money's guide to insurance