An astonishing 25 per cent of travellers still leave home without any insurance, according to the British Insurance Brokers' Association. But while you'll survive losing your luggage or facing a delay at the airport without it, you genuinely may not survive a major medical emergency abroad without insurance - it's a vital purchase. Here Cath Urquhart, travel editor of The Times and author of the new consumer guide The Times Holiday Handbook, answers the most common travel insurance queries.

1. What should the policy cover?

It should offer around £3,000-£5,000 if you have to cancel or curtail your trip, for example because of illness or a fire or burglary back home. You'll want at least £1,500 cover for loss or theft of belongings (if you have specialist camera or golf equipment, for example, you'll need more than this), and the policy should offer you some help if your flight is delayed.

Personal liability cover, typically up to £12 million, protects you if a damages claim is made against you while on holiday, and legal expenses cover (usually up to £25,000) pays for a lawyer if you need to make a claim against a third party. And the most important part of the cover is medical - look for at least £2 million of cover in Europe and £5 million for the rest of the world.

2. Why must pre-existing medical conditions be declared?

You must tell the insurer about these, because if you claim on the policy, insurance underwriters will ask your GP for your medical records, and if you have failed to declare a relevant condition your claim will probably be rejected. This could be an expensive mistake: an air ambulance alone can cost £15,000 from Spain and £35,000 from the USA, for example.

While some insurers will exclude treatment for pre-existing conditions, many conditions, such as diabetes or asthma, are acceptable to insurers if you tell them in advance. And specialists such NW Brown (0870 774 3760, www.freedominsure.co.uk), Orbis Insurance Services (01424 220110, www.orbis-insure.co.uk), Free Spirit (0845 230 5000, www.free-spirit.com) or MediCover (0870 735 3600, www.medi-cover.co.uk) will offer specialist cover to people with illnesses, even including cancer and HIV. You must also tell your insurer if your medical condition changes after buying the policy.

3. I have an EHIC - so do I also need travel insurance in Europe?

It's important to carry the European Health Insurance Card (0845 605 0707, www.ehic.org.uk), which replaced form E111 in January 2006, because it offers free or reduced-price hospital treatment across Europe. But you need both the EHIC and insurance to be fully covered. The EHIC does not cover repatriation to the UK, bills if you use a private medical clinic or are picked up in a private ambulance, or incidentals such as accommodating a relative in a nearby hotel, all of which a good insurance policy will cover. And some insurers insist you carry the EHIC, as they can reclaim some of their costs if you use it - plus the EHIC will cover you for pre-existing medical conditions which your insurer may have excluded.

4. What cover do I need for skiing and other activities?

Winter sports cover is usually an optional extra on standard travel insurance policies, rather than being automatically included. If you ski a lot it may be worth buying an annual policy rather than several short ones, but check how many days' winter sports cover it offers - it's usually 17 to 21 days per year, though policies from the Ski Club of Great Britain (0845 601 9422, www.skiclubinsurance.co.uk) and Direct Travel (0845 605 2700, www.direct-travel.co.uk) do not set limits.

You should be covered for piste rescue - by helicopter if necessary - and repatriation, all the activities you plan (such as skating or snowmobiling), and if you want to ski off-piste, check you are covered as some policies forbid this unless you are with a guide. But the Ski Club of Great Britain, Direct Travel (both details above) and Insure and Go (0870 901 3674, www.insureandgo.com) allow unrestricted off-piste skiing. Also consider policies from Snowcard (01327 262805, www.snowcard.co.uk), World Ski (0870 428 8706, www.worldski.co.uk) and Dogtag (0870 036 4824, www.dogtag.co.uk).

You must also ensure you're covered for activities on other types of holiday, including bungee-jumping, riding a moped, white-water rafting or other watersports.

5. Does my house contents insurance policy cover me?

Your possessions may be covered under your house contents policy if you have "all risks" cover, protecting them outside the house as well as inside. If so, you can decline the luggage cover on your travel insurance, which will reduce the premium.

6. Will insurance cover me if I'm caught in a terrorism incident?

Not necessarily. Graeme Trudgill of the British Insurance Brokers Association said: "After September 11, a lot of travel exclusions appeared in policies' small print - you would find that most policies exclude paying out in the event of a terrorist attack. But that's when you need your travel insurance the most."

So in 2005, Biba introduced a travel insurance policy that includes medical, repatriation and baggage cover in the event of a terrorist attack (available via Biba, 0870 950 1790, www.biba.org.uk, or through a broker). Other insurers are now starting to offer cover for terrorism risks, including Norwich Union Direct (0800 121007, www.norwichuniondirect.com) and Insure and Go (0870 901 3674, www.insureandgo.com). Consult the Foreign & Commonwealth Office (0845 850 2829, www.fco.gov.uk) to see which countries it deems at greater risk of terrorist attacks.

7. I'm over 65 - how do I find a good-value policy?

Help the Aged (0800 413180, www.helptheaged.org.uk), Age Concern (0845 601 2234, www.ageconcern.org.uk) and Saga (0800 056 5464, www.saga.co.uk) all offer policies with no upper age limit. A spokesman for Age Concern summed up these organisations' approach: "You will be asked about pre-existing medical conditions, and applications will be dealt with on a case-by-case basis. Some people are referred to a medical screening line. Cover will usually be granted, but there may be exclusions, conditions or excesses."

Orbis Insurance Services will insure elderly people aged "up to 99" - it recently insured an 88-year-old to go on a skiing trip - and it offers cover for trips of up to a year, though not multi-trip annual policies, to elderly customers, all subject to medical screening. Other insurers that offer cover to older travellers include American Express (0800 028 7573, www.americanexpress.co.uk), Churchill (0800 026 4050, www.churchill.com), the Post Office (0800 169 9999, www.postoffice.co.uk/travelinsurance), RIAS (which covers only the over-50s, 0800 068 1655, www.rias.co.uk) and Marks & Spencer (0800 068 3918, www.marksandspencer.com).

Many mainstream insurers will sell single-trip policies to older travellers, but will not sell them annual travel insurance policies. Nationwide (0500 302016, www.nationwide.co.uk), however, launched an annual policy for the 65 to 80 age group in late 2005, although it is limited to trips within Europe.

8. I'm going on a gap year - what insurance do I need?

A standard annual travel policy will not be suitable: these policies normally only cover you for trips of up to a month. You will need a dedicated "backpacker" or "gap year" policy that will offer cover for six, nine or 12 months of continuous travel.

Tom Griffiths, founder of www.gapyear.com, told me he is concerned that a large number of backpackers travel without insurance, and he believes it is only a matter of time before a parent loses their house because their child has an expensive overseas medical emergency, and no insurance to pay for it. "Our research has shown that backpackers spend more time buying a penknife for their trip than they spend buying insurance," he said. "For less than £1 per day, less than will be spent on beer, they can cover themselves."

Griffiths stresses that outdoor activities are one of the key areas for backpackers to plan for when buying insurance, and urges them to write a list of everything they might do - hiring a motorbike, skiing, scuba diving, kitesurfing, etc - before choosing a policy. Common pitfalls include policies that allow you to ride mopeds up to 50cc, but you end up hiring something with a bigger engine; and deciding to join in hazardous activities such as skydiving, egged on by new friends made abroad, without being covered for them.

If you are engaged in physical labour during a gap-year project, such as building a school, check you are covered in case of injury - some policies exclude manual work.

Companies that specialise in gap year travel insurance include STA Travel (0870 160 0599, www.statravel.co.uk), Round the World Insurance (0845 344 4225, www.roundtheworldinsurance.co.uk), Club Direct (0800 083 2466, www.clubdirect.com), Essential Travel (0870 343 0024, www.essentialtravel.co.uk), Boots (0870 730 3344, www.boots.com), Dogtag (0870 036 4824, www.dogtag.co.uk), Endsleigh (0800 028 3571, www.endsleigh.co.uk) and Columbus Direct (0870 033 9988, www.columbusdirect.com).

9. Is the travel insurance offered by my credit card or bank account adequate?

It may not be. "You get nothing for free!" said Malcolm Tarling of the Association of British Insurers (020 7216 7455, www.abi.org.uk), when I asked him about "free" travel insurance that comes with financial products. "You should check the policy limits. I bet it's not as comprehensive as insurance from a stand-alone policy - though it may be fine for you."

Note that some credit cards offer you "free travel accident insurance". This is quite a different matter - it is a type of personal insurance that pays up, for example, if you lose a limb in a ski accident. It is not a full travel insurance policy and is no substitute for one.

10. What use is an insurance broker?

If you have complex needs, such as a medical condition, or you regularly make long trips to a second home overseas, a broker is likely to be able to find a more suitable policy, and at a better price, than you can. Brokers also support your claim, arguing your case with the insurer if there's a dispute, and they may charge a lower excess than an off-the-peg policy. To find one, contact the British Insurance Brokers Association (0870 950 1790, www.biba.org.uk).

Cath Urquhart is the author of The Times Holiday Handbook (Navigator Guides, £12.95), published this month and available for £11.50 and free p&p from The Times BooksFirst (0870 160 8080, www.booksfirst.co.uk).

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