Say adios to your agent's insurance

You'll fare better if you take an independent approach to buying a travel policy, says Jasmine Birtles

Most of us will take at least one overseas holiday this year, war and stock markets permitting. But when booking your travel insurance, bear in mind that more than half of those who went abroad last year paid more than they needed to.

Most of us will take at least one overseas holiday this year, war and stock markets permitting. But when booking your travel insurance, bear in mind that more than half of those who went abroad last year paid more than they needed to.

By taking out a single-trip policy each time they travelled, these holidaymakers wasted hundreds of pounds in unnecessary insurance payments. "Even if you take only one holiday a year, it's often cheaper to get an annual policy," says Richard Mason of Moneysupermarket.com, a website that compares financial products such as insurance policies. Other websites offering a similar service include www. find.co.uk and www.moneyextra.com.

Generally, travel agents offer the priciest insurance. Many charge five times as much as independent insurers for the convenience of buying cover with a package deal.

Single traveller Joanie Conway, 39, was shocked to find that her last-minute holiday to Tobago included a £36 single-trip insurance policy from her travel operator, The Travel Shop. "I meant to get an annual policy but kept putting it off," she admits. "I couldn't believe it when they asked for £36. If I'd had more time, I'd have looked for something cheaper on the web."

If Ms Conway had shopped around, she could have bought an annual policy for £42 from Family Care (0870 556 1224), £45 from Direct Travel (www.direct-travel.co.uk) or £47 from James Hampden (www.jameshampden.com). Even if she had opted for a single-trip policy she would have paid just £27.50 with Direct Travel, £29.90 with Family Care or £30.80 with James Hampden.

Market research from Datamonitor shows that, as we become more savvy about foreign travel, more of us are buying annual policies. Unless you really are short of time, there's no excuse for taking your travel agent's insurance.

However, Holiday Which? magazine points out that although annual cover is usually the cheaper option, insurers are more cautious about issuing such policies to travellers aged over 65 or those in poor health.

This isn't always the case, though. "Don't rule out an annual policy even if you have a serious medical condition," says Roger Lakin of Holiday Which? "If you travel more than twice a year, you're still likely to get the best deal through an annual policy. Though if your health changes during the year, you will need to let the insurer know."

Companies specialising in travel insurance for older people or those with a serious illness include Age Concern (0845 601 2234), All Clear (0870 777 9339), Freespirit (01483 255887) and Medicover (0870 735 3600).

Families in particular should compare prices on policies, as insurers are constantly creating new products. For example, one policy may cover children even if they travel without their parents, another will cover more than two children, while another will cover the children of policyholders until they reach the age of 22, and so on. "Find out the cheapest deals, then phone the insurers and see what they offer and which is the most relevant to your needs," says Mr Lakin.

One way to reduce travel insurance costs, whatever your age or state of health, is to get hold of form E111 from the Post Office. It lasts indefinitely and entitles you to free or cut-price emergency medical care in any EU state and 40 other countries round the world. Good insurers will waive excess charges if you have to claim for medical expenses and use your E111 in con- junction with your travel insurance.

If you pay for all or most of your trip by credit card, you could be covered for basic needs abroad on the card's insurance. Some cards, such as NatWest's Advantage Gold Card, will cover you for medical expenses and personal liability. But this insurance can be limited so you would be better off buying a good annual policy as well.

There is no point duplicating protection, however. If your home contents insurance covers your belongings outside the home, you won't need this on your travel insurance. That could lower your premiums by between 10 and 30 per cent, without affecting cover.

Insurer Liverpool Victoria (0800 680690) has taken this concept one step further with a new "Home & Away" policy combining home contents insurance with travel. This product guarantees that you only pay once for luggage cover, personal effects, legal expenses and personal liability.