Although Portugal has one of the lowers crime rates throughout Europe, unfortunately it is still possible to become a victim of a crime.
Due to it being a tourist area, a lot of the crime is opportunist crimes such as bag-snatching and car theft.
Help avoid becoming a victim of these crimes by keeping your valuables close to your person and keep everything out of view in your hire car (for example don't leave your handbag on the back seat etc).
It's time consuming and in all honest a tiny bit boring but you should always read the small print of your cover - Ensure you know exactly what you are covered for and what you are not.
Recently some one at work found out that their cameras were classed as 'valuables' rather than personal belongings. When they tried to claim for one that had been stolen from the boot of their rental car they were not covered, and could not claim for the cost of the lost item.
So, don't find yourself in the same situation! Make sure you know exactly what your insurance will cover and what it won't!
If you do find your self in the unfortunate situation of having to make a claim, make sure you get a written police report (recommended within 24 hours of any incident).
Also it is a good idea to get statements from anyone else relevant, such as witness, hotel worker etc... Hopefully, as they probably to be used to all that goes with Algarve tourism, they will be show you the ropes of what to do.
If you intend to have more than 1 holiday this year then it is more cost effective to go for a multi-trip policy that covers for the full 365/366 days. Do your research in advance of your trip. Often the best-value multi-trip policies on the market can even be cheaper than some single-trip policies, if you search properly.
For this in Europe, they are usually even cheaper if you advise that you won't be visiting anywhere outside Europe. It then becomes more expensive if you want to include the USA and Canada, and dearer still if you want more exotic foreign parts added to the cover..