With a bit of luck, money spent on travel insurance will be money down the drain. This, of course, is not much of an incentive to buy it in the first place, but you should never leave home without it.
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Buying travel insurance is really no different to buying a pair of shoes: shop around and opt for the policy which best fits your needs. Avoid being pressured into buying the comprehensive insurance offered by most travel agents when you purchase your ticket. US$4,000 to compensate you for the inconvenience of being hijacked might sound impressive, but do you really need it?
Some degree of health cover is obviously essential. Most policies offer at least US$2,000,000 in emergency medical expenses and repatriation to your home country, which should be sufficient to cover most disasters. Note that in most cases the first US$100 or so of any claim is payable by the policyholder.
Your most difficult decision will probably be whether or not to insure your baggage and personal belongings. This really bumps up the cost of travel insurance, so calculate if the amount of cover offered would reimburse the amount you stand to lose. It rarely does, in which case you would be better off saving your money - or leaving your camera at home.
The standard policy covers you for a single trip and is priced according to where you are going and the length of your stay. Most travel insurance companies these days also offer 'multi-trip' policies designed for travelers who make a number of journeys during the year. The premium is often very good value, but the length of each trip abroad is normally restricted to about four weeks. Adventure travelers should also read the small print very carefully to establish whether or not their activities are included in the medical coverage.