Any holiday website, hotel reservations website or travel agent will be quick to tell you that travel insurance is an essential for any trip either abroad or in the same country. This 'advice' usually accompanies a hard sell for their in-house insurance, which many people purchase without even thinking about it.
However, those stuck in Europe following the Iceland volcanic eruption that closed European airspace for six days, discovered to their cost that travel insurance is not always what it's made out to be. Many discovered that even with insurance, not all of their costs were covered, begging the question: is travel insurance really essential?
Firstly, in the vast majority of cases, any travel insurance that is bought through a travel agent or when booking a holiday is likely to be overpriced. While the cover may be good, these companies capitalize on your spur of the moment decision, and the premiums can be double what the same cover with an independent company may be. So if you do decide to purchase travel insurance, make sure you shop around.
When doing so, read the small print. This really cannot be stressed enough. Think of the various situations in which you might need to make a claim on your insurance; lost property, cancellation of flights, or even more extreme situations like airspace being closed. Find out exactly how covered you are, and if there is a time limit you are covered for should you need emergency accommodation.
Then, do your sums. You may find it would be cheaper, when you factor in excess, just to set money aside to use in case of emergency rather than buying travel insurance. Only when you know the insurance would save you money in the event of a problem should you purchase it.