Like the sharemarket, the Aussie dollar may be seriously down, but as we head towards the holiday season there will still be some families getting ready to venture overseas as part of their annual vacation - and good luck to them.

Along with luggage, passports and holiday spending money, travel insurance is an essential part of any overseas (and many domestic) trips. And if you're prepared to shop around, it's possible to trim the cost of premiums.

The Department of Foreign Affairs and Trade (DFAT) doesn't mince its words when it comes to travel insurance - using the line, "If you can't afford travel insurance, you can't afford to travel".

There is no disputing that travel cover makes sense. Each year DFAT deals with over 20,000 cases involving Australians encountering difficulty overseas. This includes over 700 hospitalisations, 600 deaths and 100 evacuations for medical purposes. If you're involved in any one of these mishaps the bill can be horrendous. Hospitalisation costs in popular destinations like south east Asia, for instance, regularly top $800 per day.

According to research from insurer AAMI, seven out of 10 Aussies heading overseas do take out travel cover. Not surprisingly, 95% of those who had travel insurance said they felt safer knowing they were covered.

The same research found that almost half (46%) of all travellers purchase insurance through their travel agent. It's a quick and convenient option but it doesn't always mean getting the best value for money. Most of us would rather spend our hard earned on the vacation itself, so it's worth shopping around to compare prices and policies between insurers.

The internet has made it far easier to compare premiums charged by different insurers, and there is a plethora of websites that can provide an instant quote.

As a guide to the variation between costs, according to www.travelinsurance.com.au, a family heading off for a fortnight's holiday in Bali between December 15, 2008 and January 2, 2009, could pay premiums ranging from $180 with Toursafe, $185 with QBE or $207 with CHI (Comprehensive Holiday Insurance).

As with any type of insurance, there is more to selecting a policy than going for the one with the lowest premium. It's the nature of the protection the policy provides that matters, so do read the fine print. The reputation of the insurer for being a good and prompt payer is also significant.

Some credit card issuers offer free travel insurance if you pay for all or part of your trip with your credit card. This may sound like a good deal but the policies can be narrow, sometimes with lengthy exclusions and conditions. If your card provides this sort of cover, make extra sure to look closely at the policy before relying on it when you travel.