Travel Insurance: How Much Do You Need?

As thoughts turn to summer vacation, you’re probably more concerned with where you’ll go than whether you’ll buy travel insurance.

And even if you are thinking about buying some kind of policy, you may only be aware of the types of travel insurance that covers a car rental or insures you if you miss a cruise.

In reality, you may have a lot more travel insurance options than you think.

Take inventory of the kinds of coverage you already have through your credit cards and your life, health and auto-insurance policies. You’ll also want to take stock of your situation – your age, health, and the odds that you’ll have to cancel your trip at the last minute or return home midway through a vacation. Then, ask yourself: How much money can you afford to lose?

Once you’re up on how much coverage you already have and what you may need, consider these travel insurance options:

Comprehensive travel insurance. This type of insurance is all encompassing. It covers trip cancellations and interruptions, bad weather, lost baggage, medical care and more. “The driving force of a [comprehensive] plan is the cancellation coverage,” Damian Tysdal, a travel agent, recently told The Washington Post. The cost of such coverage usually ranges between 5 and 7 percent of the trip cost, according to the Post.

Rental car insurance. If you’re renting a car on vacation, this is the one type of travel insurance you can’t help but think about – if only because your rental agent may try to sell you a policy. Check to see what kind of coverage you already have through your own auto policy, as well as through the credit card you plan to use; your existing coverage may extend to your rental. If you’re not covered to your satisfaction, you may want to buy additional insurance at the rental counter.

Flight insurance. This type of policy insures against death or injury aboard a flight. If you already have adequate health and/or life insurance, you probably don’t need it.

Financial default coverage. Are you traveling with a company that’s on shaky financial ground? If your trip derails because a tour operator, airline, cruise line, or any other travel company unexpectedly suspends operations before or during your trip, financial default insurance can cover you.

Medical (and medical evacuation) coverage: Medicare and Medigap don’t offer health insurance coverage outside the U.S. Your insurance providers may not either. And even if they do, you may still need to pay bills abroad that your insurer will reimburse later. If your health coverage at your overseas destination seems inadequate, consider buying additional medical insurance. You can even get medical-evacuation insurance, in case you need to be evacuated by helicopter or plane from overseas – which can cost tens of thousands of dollars.

Do you think travel insurance is worth the price? What types of travel insurance have you bought?

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