British motorists who plan on driving to their foreign holiday destination this year should beware: each year thousands of motorists find themselves paying thousands of pounds extra because they are unsure about the level of car insurance cover they need to hit the road in Europe.

The classic mistake? The majority of drivers assume they will be fully covered while driving on the continent, when in reality they are only automatically given basic Road Traffic Accident (RTA) insurance. A lucky few may have third party insurance but this means they are still not covered if their vehicle is stolen or if they become involved in legal wrangling after an incident. This kind of cover is also automatically endowed on drivers in only a few European countries, so it is probably safer to assume it will not be available if you are planning to drive to your holiday destination. For a lot of motorists, this level of cover will not provide them with the peace of mind they need on holiday, particularly if they have to drive on the other side of the road, drive in unfamiliar terrain or are travelling with a family.

The surprise a lot of motorists face when they discover they will only have the most basic cover automatically if they do not upgrade their insurance stems from history and the abolition of the green card in select European countries. Before the 1990s, motorists needed this green card, essentially a certificate, as proof they were insured to drive abroad. In the early nineties, however, some (but only some) of the EU countries decided this was not necessary. Since this was not implemented in all EU countries, confusion now often arises as to what level of cover motorists have where.

This could potentially cause major problems for those driving in Europe. For instance, motorists driving in Romania could find their vehicle impounded if they fail to show a green card upon request. This is the same in Poland, Malta and Andorra too. Even in countries where the green card is not traditionally needed, such as France or Italy, motorists driving in rural areas could run into problems if they are without proof of insurance.

Getting a green card is not complicated and it is free so there isn't really an excuse not to have one. With a green card, you have proof at hand that you have basic motor insurance as mentioned above. However, even if you have a green card you will still need to upgrade your cover to make sure you have adequate insurance to drive abroad. Insurers can be quite confusing when it comes to getting a green card. Even though the cards themselves are free, insurers will often levy customers with something called "green card cover". This is not really a charge for the card itself, but means the level of cover you have in the UK is extended to cover you throughout the rest of Europe. This extension of cover can also be called "foreign use extension" and is hardly ever available free of charge from insurers.

So how much will you have to pay to be covered abroad? As with insurance in the UK, this depends on the level of cover you require and how long you will need it for. The type of car you drive and various other factors may also be taken into account by some insurance companies.

So, if you are thinking of travelling abroad in your vehicle, it is strongly advised that you upgrade your level of cover first. Even though you will probably have to pay a bit extra, it could very well be worth it if anything goes wrong. When upgrading always remember to plan ahead and make sure the relevant documentation arrives on time as otherwise you won't be considered to be covered.