But the watchword is ‘adequate'. You need to make sure that your policy covers all your potential needs, so check the terms carefully for any limitations or exclusions you might not expect.

Medical - To begin with you need your policy to have a high basic medical cover – one million pounds for Europe and at least two million for the States and the rest of the world. You won't have the luxury of our good old NHS should you have an accident in America. The medical cover should provide for an air ambulance to fly you back home if need be.

Loss of baggage and personal belongings – Be aware of any single item limit on your policy so that very expensive camera equipment wouldn't exceed the upper limit.

Cancellation – If you have paid out thousands for a holiday and have to cancel at the last minute through some unfortunate illness, you would be glad to have a policy which would refund most of your money. The same applies if you were abroad at the time and had to rush home for an emergency.

Personal liability – This is an important one especially in the States. A policy should have a minimum cover of one million pounds in case you cause an injury to someone whilst abroad, or to their property.

Emergency help line and legal expenses – a 24-hour phone line should be available on your policy. You should also be able to claim for legal expenses.

Disputes – Your travel insurance provider should be a member of the Financial Ombudsman Service. This is the body you can make a complaint to if you have a dispute that can't be agreed between you and your insurance company.

When you purchase travel insurance you must be completely honest about any medical conditions you or anyone else on the policy may have. This is important as otherwise you will be denied a claim relating to that condition.

Choose a policy where you are happy about paying the excess.

Don't sign up for anything you are not sure of. Ask questions if you aren't clear on any details, and read the small print.

Travel agents are likely to charge more for travel insurance than you would pay elsewhere, so don't automatically buy it when booking your holiday – shop around. Travel agents are best dealing with travel, not with insurance. Currently you wouldn't have the safety-net of the Ombudsman if there was a dispute on a policy sold by a travel agent.

You can save on the premium if your possessions are covered on your home contents insurance already. Also, if you are planning another trip later on in the year it might be more cost-effective to purchase an annual multi-trip policy rather than just the single. And don't accidentally buy a worldwide policy if you're just going to Europe.

If you use an EHIC card (the old E111) in Europe your policy excess may be waived if you need medical treatment.

When you start thinking about travel insurance don't forget to check your bank account and credit cards. Some had an incentive of free travel insurance if you used the card to pay for the holiday, so you may find you are already covered. Just check it's the right cover. And watch the wording – travel accident insurance only offers limited medical cover; it's not the same as full travel insurance.