It will never happen to me

After all, "it will never happen to me", right?

It can be tempting to take the chance and hope to get away with it to try to save a few dollars. But if a problem does arise, the costs can be crippling.

Hospitalisation costs at good hospitals in Southeast Asia can easily exceed US$800 per day. A medical evacuation from the United States starts at US$75,000 and can reach as high as US$300,000. Even cheaper nearby destinations can prove anything but: the Australian government warns travelers that some medical evacuations from Bali can exceed AUS$60,000. If a trip needs to be cancelled, this can mean thousands in lost deposits.

Even if you're fit and healthy and unlikely to get sick, travel insurance covers more than just medical bills. Many things can go wrong on a trip: flights can be delayed, baggage lost, credit cards stolen, an emergency might mean you have to return early or even not travel at all - most travel insurance policies protect you against these unforeseen circumstances.

Yeah, but doesn't my credit card take care of all of that?

Many credit cards include some form of “free” travel insurance, but it's important to remember that the policy only applies if you pay for the trip using the card, and that the benefits are usually not as comprehensive as travel insurance you buy separately, so you should carefully check what your credit card covers.

Know your insurance plan

Remember that when you buy separate insurance there are different plans available to suit most budgets, so it's important to take the time to look at the benefits offered to find the one that's right for you. In particular you should look at:

• The types of benefits on offer
• The value of medical expense cover
• The value of personal accident cover
• The value of trip cancellation and curtailment cover

If you're travelling as a family, then make sure you see what group policies are on offer – a family package tends to work out much cheaper per person than several individual polices for example.

You wouldn't travel without packing your toothbrush or passport: proper travel insurance should be viewed as an essential too.