Increasing competition in the travel insurance sector has led to some good news according to financial research company Defaqto: travel insurance s getting a whole lot cheaper.For example, average premiums for a single, 17 day family trip to Europe have decreased by 7%. When it comes to annual cover, similar savings are to be had. A single person, buying annual European cover would save around 6.7% on their premiums compared to last year.

Finding cheap travel insurance takes good detective work but the search will pay off if you do your homework. The most important first step in your search should be to determine your needs. Many travel insurance companies offer different levels of coverage. Buying too much travel insurance is an unnecessary expense. So make sure when you go to purchase travel insurance you review what is included in each policy and only purchase the policy that covers expenses that you may incur. Also, be aware of "special add-on's." These are usually an unnecessary expense.

In your search, the internet is the best option. With many travel insurance companies you can go to their website and view their rates automatically. Also, some travel insurance companies give discounts up to 10% if you order your policy online.

Insurance might be getting cheaper but that is no reason to be sloppy with reading the fine print. For example, trip cancellation/interruption coverage will reimburse you for any nonrefundable deposits you put down on a trip or cruise if it turns out that you won't be able to go after all, or if you have to leave early. The catch is that it will only pay out if you have to cancel or leave early because of a covered reason. That's why it's so important to read the fine print. Some policies will cover only medical reasons (say you're admitted to the hospital), and some will not cover pre-existing medical conditions like an old back injury flaring up.

It goes without saying that you'll need insurance, but it's not something you should be sorting at the last minute as despite the fact that prices have gone down, policies vary significantly and you need to spend a while reading all the small print. There are hundreds of travel insurance companies. However, not all are equal in price nor policy. For example, check if cash and indeed any of your valuables are covered - which they are often not on cheap policies - and how much the excess is that you may need to pay.

Cheaper policies are fine for the important health aspect, but don't expect to have your expensive camera, a dive or any previous medical condition covered. Conversely even on more expensive policies, don't expect your expensive IPOD Phone to be covered unless you have made special measures for it.