Insurance plays an important part in planning a trip abroad, but is fre- quently overlooked until the last minute. A 'rush job' can have serious consequences when you find yourself needing to be airlifted out of the Indonesian

jungle with a broken leg, only to discover that your insurance doesn't cover air transportation and you will have to foot the £20,000 bill yourself. It is, therefore, essential that you obtain the correct insurance to suit the particular travel and activities to be undertaken. The vast range of choice can be daunting - different types of travel insurance are sold from numerous sources, including banks, building societies, the Post Office, airlines, credit card companies and even supermarkets, but if you are unsure of exactly what cover you need, you are best advised to seek free professional advice from an insurance broker. Make sure you read the policy, particularly the small print, and understand it before committing yourself.

In 1996, a major travel insurance scheme underwritten at Lloyd's of London produced statistics showing that almost 40 per cent of claims paid related to medical expenses, 30 per cent to baggage losses and 25 per cent to cancellation claims, with the most expensive claim costing £240,000 for medical expenses.

As long as the nature of travel is understood by the insurers, an inclusive policy will meet your requirements and cover the following principal risks.

Medical expenses

This is probably the most important form of insurance, as the consequences of a medical problem may be severe - one can replace, or do without lost belongings, but one cannot replace one's health or body. Advances in medical treatment and the general availability of medical attention have increased costs considerably, and so an absolute minimum cover of £1 million is necessary and these days most policies give higher cover.

Repatriation costs are an essential part of medical insurance and under no circumstances should be limited in the policy. They can be high if a person is in a remote area and any form of complicated or specialist medical treatment is necessary. Air ambulances are regularly used to bring seriously ill travellers to the UK from Europe at costs of several thousands of pounds. When these are required for destinations further afield, prices inevitably escalate rapidly. For example, an accident in Nepal might mean a short helicopter flight to a light aircraft landing strip, followed by a light aircraft flight to an international airport, where a fully equipped medical jet could be waiting to bring the casualty back home. For severe illness or a serious accident, a medical team would need to accompany the injured person, and the costs could be as high as £60,000.

Also, any travel insurance policy must include a 24-hour emergency service so that a sick or injured person, or a hospital or embassy acting on their behalf, can summon immediate assistance. Essential air evacuation anywhere in the world should be covered, but this will not include 'search and rescue' expenses if someone is missing, even if there is concern for their health. Additional insurance for this can be arranged at an extra premium, dependent on location, duration and type of travel.

Private medical insurance in the UK is increasingly popular and often applies on a worldwide basis. However, it is important to note that such insurance often only insures the cost of direct medical treatment, and that repatriation cover is not automatic. Generally, the cover is more restricted than that of a travel policy.

Personal accident

This insurance pays a lump sum benefit if a traveller is unfortunate enough to have an accident that results in death, permanent disablement or the loss of an eye or limb. Some travellers may already have life assurance that applies on a worldwide basis and, in the event of death, would also pay a lump sum. For that reason, the death benefit under travel insurance is normally limited to £10,000. However, benefits for permanent disablement in a travel insurance policy may be as high as £40,000 or £50,000 and, if necessary, can be increased.

Cancellation or curtailment

When a journey has to be cancelled or curtailed unavoidably, the cost of a deposit or payments made in advance for travel can be recovered through your insurance policy, but it is important to check that provision has been made for this. The sum insured must be adequate to cover a traveller's total costs and an amount of £3,000 is usually provided, although, again, this can be increased if necessary. It is important to remember that travel costs may include car hire, accommodation, excursions and tours as well as airfares or other transportation. Cancellation of travel immediately prior to departure could mean losing everything paid for unless the correct cover is in force.

Personal liability

If a traveller injures someone, or damages their property, they could be liable to pay compensation. Personal liability cover deals with such claims and should provide at least £1 million protection. Do note that this insurance does not cover claims arising from the use of cars or motorcycles, which must be insured separately.

Delayed departure or arrival

Delays are increasingly common and travellers, particularly on economy tickets, are often left to fend for themselves. If delays last 12 hours or more due to strike, industrial action, bad weather or the breakdown of the aircraft, insurers will pay compensation to assist with the cost of incidental expenses. This should be no less than £25 for the first complete 12-hour period, with subsequent enhancements for longer delays. If the delay affected travel at the point of departure to the extent that the trip had to be cancelled, compensation of up to £1,000 should be payable.

Personal effects and money

The majority of travellers take as little clothing as possible when travelling and, with the increased use of credit cards and travellers' cheques, cash is usually kept to a minimum. In addition, many travellers have household policies that automatically insure their personal effects on a worldwide basis. However, when taking out cover for your personal effects, it is important to make sure that their value does not exceed the provision in the policy, which should be for a minimum of £1,200. Money should be insured for at least £250.

All travel policies limit cover for valuables (defined as jewellery, gold and silver articles, watches, photographic equipment, binoculars, telescopes, personal radios, TV, hi-fi equipment, computer and electronic equipment) and impose conditions regarding security. Valuables are in use throughout the year and so are normally insured under a household policy, which is why travel insurers usually limit cover for valuables to, say, £250 for any one article and £350 for all articles. If valuables are worth more than this they will not be covered under the travel policy.

Security for valuables is important and most insurers insist that they either be kept in hotel safes, locked bedrooms or wardrobes, or carried on the traveller's person. With this in mind, policies should be read very carefully - valuables will not be insured if they are not secured in a way specified by the policy. Money insurance usually covers airline tickets as well. A fairly typical limit for tickets would be £1,500, but it is important to be aware that tickets are insured for their cost price and not their replacement value. If a ticket is lost, the travel agent should be contacted, or the travel insurance claims adjuster - very often they can arrange for tickets to be reissued, thus avoiding more expensive replacements.

Vehicle insurance outside Europe

Vehicle insurance in the UK is simple to arrange and can easily be extended to include Europe with a Green Card. Outside Europe, particularly in Third World countries, vehicle insurance is difficult to arrange and there is no such thing as a comprehensive policy. Insurance needs to be divided in two: third party cover to protect against claims from others and accidental damage, and fire and theft cover, to protect the traveller's own vehicle. Third party cover can normally only be purchased at the borders of countries; some insist on insurance, others are indifferent. This insurance cannot be arranged in the UK. The traveller's own vehicle can be insured for accidental damage, fire and theft risks on a worldwide basis, but specialist advice would be need to be taken from an insurance broker.

A word of warning: vehicle insurance in North America differs from state to state, but generally speaking has very low third party limits. Compared with UK limits, they are inadequate and, unless increased, would expose the traveller to unnecessary risk. The limits can be increased by purchasing top-up liability insurance when hiring a vehicle.

Carnet indemnity insurance

If you intend travelling by vehicle outside Europe, you should, technically speaking, pay import duty on your vehicle every time you enter a country. This is obviously impractical and the problem can be resolved by obtaining a carnet de passage before leaving the UK. This is a multi- page document that is stamped when entering a country and stamped again when leaving the country to show that the vehicle has both been imported and exported, and as such no duty is payable.

Carnet indemnity insurance is arranged in conjunction with carnet de passage documents issued by the Automobile Association and this avoids having to provide a bank guarantee and tying up funds. The AA will require a financial guarantee equivalent to the highest duty of the various countries through which travel is intended. This can be as high as three times the value of the vehicle in the UK.

Insurance premiums are normally calculated at five per cent of the indemnity figure, but if the indemnity is in excess of £25,000 a sliding scale comes into operation. The AA requires a service charge of about £75 to provide the carnet de passage and a refundable deposit of £500. Strict instructions for the use of the carnet are issued and it is important that these are complied with, in particular, getting the carnet document stamped when entering and leaving any particular country.

It is important to be aware that the insurance guarantee against a carnet only provides immediate funding if duty becomes payable. It does not absolve the responsibility of paying the duty at a later date. To avoid paying duty at all, a double indemnity can be arranged on a separate basis. All insurances for carnets issued by the AA can be arranged by Campbell Irvine Limited of 48 Earls Court Road, Kensington, London W8 6EJ, tel 020 7937 6981.

Life assurance

These policies normally grant cover on a worldwide basis and would therefore apply while travelling. If, however, you are contemplating a particularly unusual or hazardous form of travel, it would be sensible to check with your life assurance company to make sure that no limitations apply.

Claims procedure

Claims that necessitate immediate attention can be dealt with by emergency claims facilities, something made available these days by all insurance companies. This is particularly relevant for medical claims, especially those involving repatriation. However, it is important to remember that contact must be made to get the best use of emergency facilities. Routine claims can normally be dealt with at leisure or on return to the UK. Any documentation relevant to a claim needs to be kept secure, so if it has to be posted it is important to take copies.

If property is lost, claims loss adjusters normally require some evidence of value. Original purchase receipts may not be available, so it will normally suffice to state when and where lost property was purchased, and how much was paid for it.

All insurance policies carry excesses, which are normally deducted from the settlement figure of a claim. Travel insurance claims are usually subject to an excess that should not exceed £50, but vehicle insurance excesses tend to be higher and an amount of £250 would not be unusual. Excesses are always clearly shown on policy documents and if there are any doubts about this, the position needs to be checked before travelling rather than leaving it until a claim is made.