An article posted on fairinvestment.co.uk yesterday showed the current confusion over travel insurance. It highlighted that over the last year three and a half million British holidaymakers have travelled to Europe without travel insurance, under the assumption that the European Health Insurance Card alone provides adequate cover. So what exactly is the European Health Insurance Card and how does it compare to travel insurance?

The European Health Insurance Card was introduced in 2006 to replace the E111. The card allows you to have access to state healthcare in European Economic Area countries, such as Iceland, France and Spain, for a reduced fee and sometimes even for free. It costs nothing and needs to be renewed after five years, but it cannot be used by those who go abroad with the sole intention of receiving medical treatment.

The EHIC covers you if you need medical treatment while you are on holiday, this can include maternity care, dialysis, and conditions that may arise from illness or an accident whilst you are abroad. Also, if you do pay for treatment, an EHIC means you might be able to claim back the cost when you return to the UK.

Despite the obvious benefits of an EHIC, it cannot replace travel insurance. The EHIC does not cover you if you need private healthcare, or attention that is not provided by the state healthcare system. It will also not cover any travel costs, including rescue from a mountaintop via helicopter, or if you need to be brought back to the UK after an accident. It is also important to note that not all regions in the EEA necessarily have state healthcare, subsequently the EHIC will not be of much use in these areas.

Consequently, it is recommended that the European Health Insurance Card is used in conjunction with travel insurance, in fact some insurance companies only give travel insurance to customers who already have an EHIC. This is particularly important with the upcoming ski season, and many travellers hoping to hit the pistes at Christmas, whilst hoping to save as much money as possible.

The truth is that in the great scheme of going on holiday, travel insurance shouldn't be too expensive. Many companies, including Post Office, offer a 10 per cent discount online, and there are deals to suit every kind of traveller, whether you need single trip or annual cover - with the optional extras of customizing your package if you're planning on skiing or snowboarding.

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