A holiday in the sun? Make sure you're covered

Hugh Thompson and Christine Stopp on catering for unpleasant surprises

This winter Thomas Cook is offering a 15 per cent discount on a two-week winter sun package in the Canary Islands, a saving of pounds 60. However the holidaymaker only qualifies for the discount if he or she buys Thomas Cook's travel insurance at pounds 32.95 for the two-week break. That is considerably more than most others would quote for the same cover. Lunn Poly and Going Places do similar tie-in insurance deals with their discounted holidays.

In a recent survey by Which? magazine, none of the major travel agents came out well in a review of more than 100 policies on offer. Which? picked out Inter Assurance, Folgate, GA Direct, Sun Alliance and Help the Aged as the best buys if the cover is for Europe only. For worldwide annual travel policies, Direct Travel and World Cover Direct also featured.

For regular travellers who take several trips abroad each year, annual policies will generally be cheaper than trip-by-trip insurance. The broker Campbell Irving does an annual policy which costs pounds 92.50 for an individual and pounds 138 for a four-member family. The same broker quotes pounds 200 for a 17- day family holiday in the US where medical costs are much higher.

One of the commonest mistakes people make about travel cover is to rely entirely on the form E111 medical cover system (available at post offices). Its aim is to offer free or low-cost medical cover in EU states for British citizens. But with this cover limited to emergency treatment in state hospitals, the holidaymaker might still have to deal with distressing holiday complaints like bad sunburn or upset stomachs. In countries such as Spain, where there are not many state hospitals, you might find yourself in a private clinic where you would be wholly responsible for the bill. Nor would the E111 cover the cost of bringing a sick holidaymaker back to the UK.

Many policies exclude valuables like jewellery, camera equipment, personal stereos and sunglasses. These may, however, be covered under the "all risks" section of your home contents policy.

Not all annual policies cover activities such as skiing. Winter sports policies may not cover snowboarding or off-piste skiing.

Travel policies will not cover pre-existing medical conditions unless they have been specifically agreed with the insurer. Older travellers should also check their cover, as they may be required to give evidence of good health.

Belongings may be covered on an indemnity, not a new-for-old basis. In other words, the original cost of your suitcase of holiday clothes will be discounted for wear and tear.

IN CASE OF EMERGENCY ...

The basic cover you should look for in any travel policy:

Cancellation and curtailment: At least the cost of the holiday. The most comprehensive policies offer up to pounds 5,000.

Missed departure: (for a genuine reason, not just because you cut it too fine!). Best cover among the policies we looked at was pounds 1,000.

Accident: A Yorkshire man is currently being sued for more than pounds 80,000 by the victim of a car crash in which he was involved while on holiday in the US. He thought his accident policy covered motoring, and found out too late that it did not.

Personal accident: Look for the highest possible maximum. Policies we looked at ranged from pounds 10,000 to pounds 30,000 for disablement. Not all had a death benefit.

Medical: Look for unlimited cover. Treatment and repatriation expenses can be enormous. Failing unlimited cover, pounds 5m is acceptable.

Property: The best you can find will probably be pounds 1,500 overall cover with pounds 300 for valuables.

Personal money: pounds 500. Not covered as standard by all policies.

Loss of passport: pounds 300 was the best cover we found.

Personal public liability: Another area where costs could be horrific. pounds 2m is the best on offer.

Travel delay: pounds 100 is the standard amount offered for delay during your holiday.

Legal expenses: Not covered by all policies. Go for the best cover you can find. The highest we saw was pounds 25,000, the lowest pounds 5,000.

When to buy: Take out your travel cover as soon as you are committed to your holiday - don't leave it until the week before you get on the plane. Some 14 per cent of travel insurance claims are for cancellation.

COST OF TRAVEL COVER FOR A SINGLE ADULT

Bradford & Bingley pounds 115 pounds 22 Columbus pounds 87 pounds 16.75 Europ Assistance pounds 99 pounds 19.69 Thomas Cook pounds 125 pounds 32.95 Thomson (Summer Sun brochure) - pounds 28.50

Columbus and Europ Assistance both offer basic cover only for the premiums shown. Additional cover options can be had for extra cost.