It is essential to be insured when you're on the road. Of course, 99 out of 100 times you won't need it at all, but if something serious should happen to you in a far away country, you will be ever so glad that you got some decent travel insurance.
The most important thing to have is health insurance, as the bills for medical treatment can rise to unbelievable heights. Everyone traveling abroad should have decent travel insurance with a good coverage for all necessary medical and dental treatment. The general coverage that most people already have will not be valid outside of their country, so check with your travel agent about available extended medical policies and their boundaries.
Among other things, travel insurance will also help a lot if theft occurs. If you have high value items such as an MP3 player/iPod or a digital camera, for a relatively small upfront investment you will be secured that you won't have to save money to buy all your items again. With any policy, read the fine print and make sure your policy does not exclude some 'high- risk' activities like scuba diving or bungee-jumping if these are things you are planning on doing.
Make sure that you take your insurance card with you and don't forget to scan it in and e-mail it to yourself, along with copies of your passport and other important documents. By doing this you will always have a copy of your documents available.
There are a number of companies who specialise in travel insurance where you pay for the number of weeks/months you want to be covered for. However, if you are planning on a longer journey, a much cheaper option might be to find a continuous (all year through) travel insurance at a normal insurance company from your own country. These cover all the necessary things as well, but generally ask a lot less than temporary travel insurances.
When choosing your travel insurance, there are a few important things you should pay attention to:
There are loads of travel insurance companies out there, and all differ greatly in price, coverage, extra options, refund amounts, and so on. Most importantly decide on your plans and destinations, what kinds of coverage you want, inform yourself, compare travel insurance and choose wisely.