Travel Insurance: Protection from Your Worst Trip Nightmares

Imagine finally starting your dream vacation. You step out into the streets of Venice, sit down to take your first bite of real Italian pizza and ... wait. Where's your wallet? You'd better hope you have travel insurance.

From snatched purses to food poisoning, travel insurance helps to cushion the blow of those unexpected emergencies -- especially when your trusty medical, auto and personal belonging insurance doesn't travel with you.

A friend of mine was scheduled to take a Mediterranean cruise departing from Barcelona. Her first flight was delayed, so she couldn't make it to Spain in time to depart on her cruise. Fortunately, her travel insurance reimbursed her for the full cost of the cruise. She didn't want to gamble with the odds, and for her, it paid off.

There are hundreds of situations where travel insurance is a no-brainer, so here's a guide to finding the right coverage for you.

How Much Is Travel Insurance?

Travel insurance typically costs between 4% to 8% of the entire trip cost (including accommodation costs and transportation costs -- flights, rental cars, train tickets, etc.). The actual cost of your policy will mostly depend on your age, trip length and the policy add-ons (i.e. upgrades) that you may include.

For example, a $3,300 trip for a 32-year-old going on a one-week trip to the Bahamas would typically cost between $150 to $250, depending on the insurance provider and benefits offered.

Squaremouth.com can help you compare quotes from different travel insurance providers so you can get a more personalized estimate. Remember, just because the insurance offered from a specific company is more expensive is no guarantee that the coverage is better, so be sure to look at features closely.

What is Covered Under Travel Insurance?

Travel insurance offers a wide umbrella that may cover:

  • Lost or stolen luggage
  • Medical emergencies and emergency evacuation
  • A travel supplier ceasing operation
  • Trip cancellation
  • Trip delay costs (possibly from bad weather)
  • Possible damages/delays caused by terrorist attacks in a destination city

Each plan covers a different number of these unexpected events, but at a minimum, the insurance should include portable medical emergency coverage.

Keep in mind that not all policies will cover pre-existing conditions, so if you have one, you may be required to purchase an additional policy add-on.

There might be a lot of things included in the coverage that you don't need, so review the fine print and see if you can reduce your coverage for a discount rate. For example, if your policy includes rental car coverage but you aren't renting a car, ask how taking that out changes your policy's price.

Know Exactly What Your Travel Insurance Policy Covers

Insurance providers are required to answer any and all questions you might have about the policy, so be sure to ask to about the exact coverage you are getting.

Will lost luggage insurance cover an expensive camera you may leave behind in a cable car in Bergen? Would the insurance cover your belongings if someone robbed your hotel room? Know the answers before you purchase and certainly before you leave for your trip.

Frankly, I've been to more than 30 countries and have never encountered a situation where I would need travel insurance, but accidents happen.

People often are involved in novel activities and behaviors on vacation, which can make them more susceptible to injury.

I would suggest travel insurance for these five scenarios:

1) If you are going on a cruise that departs from another country

2) If you are a big worrier

3) If you have health problems

4) If your vacation includes potentially dangerous activities, like extreme climbs or river rafting

5) If your trip is longer than one month

One final tip before you decide to purchase travel insurance: Check to see if your credit card provides any insurance coverage on trip or transportation purchases. Some credit cards already provide travel insurance on airfare and travel packages purchased, so you may not need to get a full-blown policy. Regardless of your decision, be safe, shop wisely and have a great trip!

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