Things can go wrong on holiday. You could fall ill or have an accident, you could have money or luggage stolen, or your visit might be cancelled or cut short because of injury or illness. You can cover these risks and many more by buying travel insurance.

Buying travel insurance

The costs of medical care abroad can be high; a medical evacuation to the UK, for example, will cost you thousands of pounds, so getting proper insurance is vital.

A number of websites help you compare travel insurance. Bear in mind that a cheaper policy may have less cover. If you make several trips each year, consider taking out annual multi-trip insurance.

You should ensure your policy covers:

• Extra costs incurred to get home
• The period of time that you're away
• Pre-paid expenses such as excursions
• Any activities and sports you might do
• The refund of the full cost of your holiday
• Any need to cancel or cut short a trip, for example, because you fall ill
• Personal liability (the costs of a claim if you accidentally injure someone or damage their property)

Most travel insurance policies don't cover the financial cost caused by a travel organiser becoming insolvent (though some do). However, package travel organisers must provide protection to travellers for that. How they provide that protection depends on where they're based and whether a flight is included in the holiday:

• If the holiday includes a flight and the organiser is established in the UK or outside of the European Economic Area (EEA), that will be in the form of an ATOL (Air Travel Organiser's Licence).
• If they're established in the UK or outside of the EEA and the holiday doesn't include a flight, they must provide financial protection via a bond with an approved body, through insurance or by paying traveller money into an independent trust account.
• If they're established elsewhere in the EEA, they'll provide protection in line with their country's regulations.

Check the conditions and exclusions

Check the small print of your insurance policy very carefully to see if any exclusions might apply. Exclusions are situations or conditions that, if they exist, will allow your insurer to refuse your claim. They're always set out in your policy.

If your trip involves particular sports or activities that are considered a risk, check that your insurer offers extra cover; you may need to call a specialist insurer. Some policies exclude some activities. If requested, many insurers will extend cover; otherwise you should find a specialist policy.

If you're in any doubt, contact your insurer to find out exactly what cover you have. Bear in mind that most policies won't cover you:

• For alcohol or drug -related incidents;
• If you haven't taken reasonable care of your possessions; or
• If you haven't declared anything that you think might affect the cover, like current or past medical conditions.

European Health Insurance Card and Global Health Insurance Card

Before 31 December 2020, when travelling to Europe, the European Health Insurance Card (EHIC) gave UK travellers rights to any healthcare that they might have needed during a temporary visit to the European Economic Area (EEA) countries or Switzerland. It gave UK travellers access to the same emergency or necessary state-provided medical care as they get at home, at the same cost that a resident of the country would pay. So, it covered pre-existing conditions and allowed people undergoing NHS treatment for chronic conditions to continue receiving that treatment while away.

All EHIC cards issued before 31 December 2020 remain valid for use in the EU until their expiry date. However, it won't cover you if you're travelling to Switzerland, Norway, Liechtenstein, or Iceland. If you're resident in the UK, you can use your UK passport to access state-provided medical treatment in Norway.

If you don't have a valid EHIC card, apply for the new UK Global Health Insurance Card (GHIC). This will give you cover in EU countries that's broadly similar to what you would have had with the EHIC.

An EHIC or GHIC is never a replacement for travel insurance because it does not cover eventualities such as:

• private medical healthcare or costs
• repatriation of your body
• rescue services, for example from mountain climbing or skiing excursions
• loss of property
• travel disruption.

Trade Associations

Always book through an agent that's with the Association of British Travel Agents (ABTA), Air Travel Organisers' Licence (ATOL) or other relevant financial protection organisation. If they're established in an EEA member country other than the UK, they'll probably be a member of, or provide protection through, a scheme from their country. If it's a package holiday, they must provide financial protection for their insolvency, but it need only be from the country where they're established.

Decent travel agents and tour operators will give you security by holding:

• A suitable insurance policy
• An Air Travel Organisers' Licence
• Consumer pre-payments in a trust account such as a Travel Trust Association account
• Membership with an approved body such as ABTA, the Association of Bonded Travel Organisers Trust (ABTOT) or Bonded Coach Holidays (BCH)

Many of the travel arrangements provided by these types of companies are protected in case the travel company fails financially – if it's a package holiday, that protection must be provided. You should, however, always ask your travel company if protection applies to your travel arrangements. If it doesn't, the company may be able to offer suitable insurance to cover you.

Cancellation or cutting a trip short

Your policy should pay out if you need to cancel or cut short a trip (this is often referred to as 'curtailment'). You might need to curtail your trip because, for example, you fall ill. It should cover pre-paid expenses, such as excursions, and any extra costs incurred in getting home.

Check your policy documents to see what would be covered, such as accident, illness and unknown future events like having to attend jury service.

Cover can also be provided if you're needed at home because of a fire, storm or flooding.

Some policies also cover cancellation that could happen if you're made redundant or if a strike or bad weather affects the departure of a flight or ship.

You should get a policy with enough cover to refund the full cost of your holiday.

Lost or damaged possessions

Travel insurance can cover stolen, lost or damaged possessions. You can normally set the limit of the cover, but the limit should be adequate and realistic for your own circumstances. The higher the limit of the cover, the more expensive the policy will be.

Policies will generally limit claims for single items – the limit can vary from around £250 up to £1,000 or more. There is likely to be a similar limit on the total paid to replace valuables, such as cameras or jewellery. Check that these limits are sufficient.

You shouldn't rely on compensation from the airline if it loses your luggage. By law, airlines need only pay a specified minimum value per kilo of lost luggage – this will probably be inadequate to cover the full value of your belongings.

Most insurance policies will require you to take care of your belongings at all times. If you don't, the policy might not pay your claim.

Any losses should be reported to the local police within 24 hours, and your insurer will need proof of notification when you make your claim.

Repatriation

Many holiday insurance policies have a provision for emergency repatriation. This means returning you to the country that you live in. Insurance companies require that you adhere strictly to their terms and conditions, so it's important that you've read and understood the terms before starting the process of emergency repatriation.

If you're relying on them to reimburse you for emergency flights, contact your insurance company directly before making travel arrangements, as they usually have specific procedures and/or providers that you should use.

Legal expenses

You may also want to check if your policy covers you for legal expenses to help you claim compensation or damages following an injury while you're abroad. This could be particularly useful if there isn't a system of getting free legal advice in the country you're travelling to.

Financial protection

Some travel insurance policies cover you if your airline goes out of business before you travel or while you're abroad. If you have no other form of financial protection, you might want to ensure you buy a policy that includes this cover. As said above, if the flight is part of a package holiday, it must be covered by an Air Travel Organiser's Licence (ATOL).

For more information, see Financial protection.

Tips for when you travel

Make sure you take a copy of your policy and the 24-hour emergency phone number, if there is one, and that you know what to do in the event of a problem. Some insurance companies insist that you call their assistance company as soon as possible after a problem arises.

If anything does happen, keep as much paperwork as possible - tickets, receipts, medical bills, police reports, etc. This will help prove that what you're claiming for actually happened.