So you've booked your dream vacation and you can't wait to go. Nothing is going to get in your way, right? Well, you hope not anyway. But what happens if you or your family gets sick?  What if there's an emergency at home that causes you to miss your trip?  Hundreds if not thousands of dollars could go down the drain.

“But travel insurance is a waste.” Sure, it can be. But if you're smart, and ask around, it could be a lifesaver! First, let's look at some reasons why travel insurance might be worth it.

Why Would Anyone Buy Travel Insurance?

Peace of Mind
According to the U.S. Travel Insurance Association, almost 30% of Americans buy travel insurance.  For those wanting to go on a cruise, that figure jumps to about 70%! The peace of mind that comes from buying travel insurance is important for a lot of people.  Your vacation can be one of the largest expenses of the year, so insuring it against some of these things can save you money in the long run.

Airline Delays
Believe it or not, planes get delayed. (Say it isn't so!) If you travel a lot, I'm sure you've experience it once or twice. But what happens if your plane is delayed and you miss the cruise you've been waiting for all year? Bon voyage, vacation!

If you have travel insurance, it will usually cover the costs associated with the delay. But don't get too excited. Depending on your coverage, you might not be fully covered. That's why it's so important to read through the contract carefully and to ask questions to the representative selling the policy.

Family Issues
What happens if you book a trip a long time in advance and you find out that you're pregnant?  Or what if a family member becomes terminally ill, forcing you to reevaluate your travel plans in the coming months?

Life happens, and for those trips that are planned out far in advance, you might benefit from travel insurance.  You never know when someone is going to get sick and keep you from your vacation.

Emergencies and Other Accidents
Most travel insurance plans will have accident and emergency medical options as well.  The question you need to ask is "Will my vacation have higher than normal risk?" Are you booking a trip to South Africa to explore the wildlife and tour the bush? That's a little more dangerous than a quiet trip to a beach resort. Be smart about your travel situation and think about the risks involved in your excursions. The few extra dollars you pay for travel insurance might be worth it if you plan on doing some risky adventures.

Finding Appropriate Travel Insurance Coverage

Before you book the first travel insurance plan that you find online or through your travel agent, check with your credit card company first.  Many credit cards will automatically insure you for a few common mishaps while you're traveling.

Common coverage offered by credit cards:

  • Rental car coverage
  • Air travel accident insurance
  • Delayed baggage reimbursement
  • Medical emergency hotline
  • Accidental injury or sickness

Not every credit card provides the same coverage, so be sure to check with your credit card provider to see what's included with your account.

If you feel like more coverage is necessary, Forbes.com recommends that you compare travel insurance plans with sites like InsureMyTrip.com and SquareMouth.com.

Buying Travel Insurance Out of Pocket

If you decide to buy travel insurance, make sure you ask the right questions.  If you're working with a travel agent or directly with a travel insurance broker, ask the following questions:

  • Are pre-existing medical conditions covered?
  • Are injuries, sickness, and other medical emergencies covered?
  • Is this coverage primary or secondary? (Secondary coverage means that you'll need to make a claim with your homeowners or medical insurance first.  Primary coverage means that the travel insurance will cover expenses before other insurance plans kick in.)

Expect to pay anywhere from 4-8% of the total vacation cost.  For example, if your vacation is going to cost $2,500, you should look to spend $100-$200 on travel insurance.  This is based on the guidelines provided by US Travel Insurance Association.

The cost can vary greatly depending on the type of travel insurance you're getting, so make sure you talk it through with your travel agent.

Have you ever used travel insurance while on a vacation?  Do you think travel insurance is worth it?

This has been a guest post by Tim from Kirksville, MO
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