Ditch the packaging: Save money on travel insurance

Packaging: a retailing trick to make you think a few cheap components deserve a much higher price by virtue of being bundled together for your convenience.

You need holiday insurance for peace of mind, especially if you are an independent traveller.

For once, the holiday companies are not exaggerating about the need for paying supplements, at least when it comes to insurance. Be careful though, because right after assuring they would be happy 'to save you the time and bother' by offering insurance for your trip, they will proceed to gouge you on the policy premium. Some holiday companies profit as much from their insurance sales as their holidays. When we asked at high street travel agents about a trip to Malta, we were quoted £32 per person for a fortnight's worth of insurance!

(No lifeguard + Slippery rocks) x No travel insurance could = Big trouble

Yet again, the internet comes to the rescue. Because there are so many things to take into consideration (single trip vs multi trip, winter sports vs extreme sports, etc) my best advice is to spend 5 minutes reading Martin the Money Savings Expert's guide before spending another few minutes online fine-tuning the best quote to suit your needs.

All this can be done online and sorted the night before you travel, so you have no excuse, especially at premiums this low. In fact, some premiums are so cheap that people feel dissuaded from buying them and instead pay extra for enhanced policies.

These are a swizz and aren't necessary. Some of these boast 'platinum' medical coverage up to £200 million, when in fact £2m is more than sufficient for even the most unfortunate travellers out there.

For £200 million they could hire the President himself to airlift you off this mountain in Air Force One

Whatever you do, don't assume your current insurance will cover you abroad. And if you are a UK resident, don't think for a minute that your E111 card will see you through. That's because the E111s were replaced in 2005 by the European Health Insurance Card (EHIC).

EHIC entitles UK citizens to free or discounted healthcare across the rest of the EU. So why do you need travel insurance on top of the free EHIC? For a start, the paperwork can take time to process and you often need to pay the bill upfront before being refunded much later on. In addition, the fine print states that you will be treated the same as a resident from the country you are visiting, so if citizens of that country pay something towards doctor visits and hospital bills, then you will be expected to cough up as well (money, that is, not a lung). Many travel insurance policies will pay this excess for you.

Also, if things turn serious EHIC will not contribute towards your repatriation (a fancy word for 'coming back home' if you've missed your flight, either because you were too ill to fly or have ended up in a pine box). And on a less morbid note, EHIC won't cover for you other things that can go wrong during your holiday, like lost baggage or cancelled flights.

Despite its shortcomings, the EHIC is a free benefit and one every European traveller should take advantage of.

UK residents can apply for an EHIC online, by picking up the form at a Post Office or by ringing 0845 606 2030. Have to hand your National Insurance Number, date of birth and full names of each person you're applying for.

Apply well before your holiday. They aren't nearly as slow as the passport office, but you will need to allow at least a fortnight for your card to come through.

If you have your EHIC already, be sure to check its expiration date as they last only up to 5 years.

So take a couple of easy steps towards saving money on your travel insurance, so you can sleep easy during your trip!