No-one wants the unexpected to happen when they go abroad, but unfortunately there is no such thing as a totally risk-free holiday.

Last year there were more than 400,000 insurance claims by UK holiday-makers and business travellers, according to the Association of British Insurers.

Travel insurance is not so much an optional extra as an integral part of any holiday. Policies need to cover the obvious problems, such as a stolen wallet or purse, an accident or an illness. But good policies will also provide compensation for delays and cancellation, for damaged or lost luggage, and even a telephone help line for emergencies.

What Type of Cover?

The simplest way to buy travel insurance might seem to be through a travel agent or tour operator. Sometimes, these policies are free, but where they are not free they can be expensive. Travel agents are no longer allowed to insist that holiday makers book insurance through them, and it's almost always possible to find a better deal by shopping around.

The traditional way to buy travel insurance is to take out cover for each trip, and this is usually how tour operators sell their cover. If you only make one or possibly two trips abroad a year, this might be the best option. A growing number of travellers, however, are opting for annual travel insurance.

Annual Multi Trip Travel Insurance

The advantage of an annual policy is that there is no need to worry about arranging cover for each journey, and it is usually better value than buying individual policies for two or three trips a year.

Most annual policies will cover trips of a month or more, and they can be bought to cover Europe or world-wide travel. It's usually possible to add business cover or insurance for sports such as ski-ing for an additional charge.

Annual travel insurance is an even better deal for families. Insurance for a couple will be cheaper than for two single adults, and cover for a family with children under 18 is not usually much more expensive than cover for a couple. Do watch, though, for restrictions on how the cover works. Some family travel policies only cover the family if everyone travels together. The best policies will cover each adult travelling on his or her own, and even unaccompanied trips by the children.

Remember

Unlike a standard single trip policy, in order to obtain cover for cancellation, with annual travel insurance the policy start date needs to be the date on which you book your first trip or decide to purchase the policy rather than the date that you intend to travel.