Around £1 million in travel insurance claims was paid out every day last year typically, according to industry figures.
Across 2016, a total of £370 million, equating to around £1 million every day, was paid to help 480,000 travellers and their families who needed help abroad, including claims for emergency medical treatment and lost baggage, the Association of British Insurers (ABI) said.
This was the highest amount paid since 2010, when disruption caused by the Icelandic ash cloud pushed claims costs to an all-time high of £455 million.
Last year's total includes £17 million paid out for baggage and money lost by people while travelling, £199 million on emergency medical treatment and £130 million for cancelled holidays.
As people prepare for their summer holidays, the ABI is reminding them to shop around for a suitable insurance policy.
It said the cost of the average annual travel insurance policy is £37, compared with the average medical claim costing £1,300, and the average cancellation claim standing at £816.
Single trip policies can be cheaper, the ABI said, often costing less than what a family may spend on a snack or a couple of glasses of wine at the airport.
The ABI's analysis of claims paid by travel insurers last year found:
:: £199 million was paid out to help 154,000 travellers needing emergency medical treatment. This included a £100,000 bill for treating an abscess in the United States, £16,000 treating a fractured leg following a motorcycle accident in Thailand, and £11,000 to remove a brain tumour in Spain.
:: £130 million was paid out on 159,000 claims over cancelled holidays.
:: £17 million was paid on 83,000 claims for baggage and money lost while travelling.
Mark Shepherd, assistant director, head of property at the ABI, said: "As millions of people gear up for the summer holidays, for some unlucky travellers their break could turn into a nightmare.
"Falling ill abroad must be the number one worry as medical treatment abroad and repatriation back home can cost tens of thousands.
"Travel insurance is not a nice thing to have but should be an essential purchase. Insurers support and help thousands of travellers and their families should the worst happen, paying nearly nine in 10 claims that are made."
Here are some tips from the ABI to make sure you are covered when travelling abroad:
:: Shop around. Travel insurance policies vary to suit different needs so it is essential to shop around, and bear in mind the cheapest policy is not necessarily the best as it may not cover all that you need.
:: Make sure you have a valid European Health Insurance Card (EHIC) when travelling in Europe. It is free and gives you access to state-provided healthcare available to a resident. But it is not a substitute for having travel insurance and will not cover all medical costs, or the cost of emergency repatriation back to the UK.
:: Act responsibly. Check safety before taking part in any activity, and follow laws and customs. Generally, travel insurance policies will not cover accidents if someone has not taken reasonable care or had excessive amounts of alcohol.
:: Check the Foreign and Commonwealth Office travel advice and information pages for your destination before you travel.
:: Declare any medical conditions up-front. Tell your insurer about any medical conditions when you take out a travel insurance policy.
:: Know how to contact your insurer if you need to. Make sure you take note of your insurer's emergency phone number. If something happens when you are on holiday and you need to make a claim, call your insurer first for help.