Βι¶ΉΤΌΕΔ

According to the Foreign and Commonwealth Office, two thirds of us will spend less on our holiday plans this year due to the credit crunch.

By following Lucy's tips, you should be able to cut the cost of cover without cutting corners!

If you're travelling in Europe the EHIC or European Health Insurance Card replaced the old E111 form in 2006. If you're a British resident it means you can claim for medically necessary treatment when you visit countries in the European Economic Area and Switzerland.

It'll cover the cost of things residents of the country you're visiting would get for free. But, it doesn't mean you don't need to buy separate travel insurance because it won't cover you for private treatment, or the cost if you need to come home.

You can apply for the EHIC at the post office, over the phone, or on the internet through the NHS website.

Take care if you do decide to apply on line some companies will actually charge you a fee to use their website, and there's no need to use those sites at all. The card is free from the NHS and will be with you a few days after you apply online.

So, how do you choose the right insurance cover? Well, it all depends on you and your circumstances... there's no one size fits all approach to insurance because everyone's different.

You could always do the traditional thing and go direct to insurance broker - they can help find the right policy for you.

But if you want to cut out the middleman, some consumer organisations and online finance sites list of their best buys for travel insurance, and if you want impartial advice, they're a really good place to start.

According to Which, 55% of their members buy insurance direct from an insurer. That's a great first step to reducing the price you pay.

And there are lots of price comparison websites which can throw up a range of options for cover. But do watch out: cheapest isn't always the best. You must make sure the policy you buy is right for you.

If you need to make a claim and all you checked was the price, then you could find you're not covered and that can be devastating.

Getting yourself flown home to the UK in the event of an emergency isn't cheap. Without insurance, this could cost you or your family more than Β£30,000.

Let's talk about all these expensive toys you're taking. You need to make sure your insurance policy covers the full value of anything you might want to claim for - lots of policies will have a cap on how much you can claim, or there could be a high excess.

If the airline you're travelling with mislays your luggage, they don't have to refund you the full value of what you've lost; they only have to pay a set value per kilogramme of checked in baggage.

More than 6.2 million bags went missing in 2007, and although around 85% of lost bags are returned to their owners within 48 hours, some never get returned at all.

So it may be a good idea to leave the expensive stuff at home - take an old phone handset and a basic camera on your hols - it makes you less likely to be a victim of crime too.

And - check your home insurance policy, you could find you're covered for possessions away from home, so you might be better off claiming from them!

If you only holiday once a year, then a single trip policy could be right for you. But iIf you're a frequent traveller you might want to think about the benefits of an annual policy which will cover several trips up to a specific number of days and could work out cheaper in the long-run.

Insurance costs more for countries like the USA because medical treatment is more expensive there, so pick a policy which covers you for where you're actually going. If you're only travelling in Europe it'll be cheaper.

But if you're going backpacking then make sure your policy covers you for the entire trip, in every country you're going to.

According to the Foreign and Commonwealth Office, injuries abroad are most likely to occur on roads and beaches, at hotels, remote locations and ski slopes.

If you're going on a specialist trip, you need to make sure that the insurance you buy is right for you. A camping, trekking or extreme sports holiday will bring additional risk of injury and you should make sure you're insured for any activities you're taking part in.

If your policy excludes activities like mountain biking, and you take a tumble, you could face a hefty medical bill.

It's really important when you buy insurance that you let the company know about any illnesses you've had in the last few years, what they call pre-existing conditions.

If you don't tell them about doctor's appointments, hospital visits or tests - even for something you might think is really minor - then you might find they refuse to pay out, even if the medical condition is nothing to do with what you're actually claiming for.

If you follow Lucy's advice, hopefully you'll be well on the way to a happy, healthy holiday. And if the worst should happen, at least it'll be the insurer who foots the bill, leaving you free to plan your next adventure.