Travel insurance can have several components that can be included in a single policy or purchased separately. Because policies can vary widely, read them carefully (especially the fine print) to see what is covered and what is excluded. These are the major types of travel insurance:
- Trip cancellation/interruption will cover you if the cause of the cancellation/interruption is on the policy's list of acceptable reasons. Some policies only cover medical reasons. Pre-existing medical conditions may be excluded. Make sure the policy includes supplier default which pays if the company that you booked the trip with goes out of business.
- Baggage insurance/personal effects will cover you if your baggage or personal effects are lost, stolen or damaged during the trip. This is very expensive insurance — about $50 per year to insure $1000 worth of personal belongings for a week. Before purchasing this insurance check out what other coverage you may already have such as off-premise theft in your homeowners/renters policy. If you are taking expensive equipment on your travels, look into adding an endorsement to your homeowners/renters policy.
- Emergency medical assistance/emergency medical evacuation covers medical treatment and transportation elsewhere for treatment. Before purchasing check out what your health insurance already covers particularly for traveling abroad.
If you are considering purchasing travel insurance, most experts recommend that you should first check your homeowners/renters and health insurance policies to see what they cover. Then you can decide if you need to purchase travel (or other) insurance to fill in any gaps.
These resources have more information about travel insurance.
Travel Insurance: The Benefits and Limitations from FindLaw.com describes the different types of travel insurance and what they cover.
Travel Insurance - Is It Necessary? from the Better Business Bureau provides tips for deciding if you need travel insurance.
Tips for Purchasing Travel Insurance from the TravelSense site from the American Society of Travel Agents.
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