Do you need trip insurance for your vacation?

Trip insurance cost and coverage options

Trip insurance generally costs 5-10 percent of the cost of your trip, depending on the vendor and the coverage you select.

What the trip insurance covers varies by policy, so you need to do some research to decide which parts of your trip, if any, you are willing to gamble on. For example, my friend got trip cancellation coverage in case of a hurricane because her flight and hotel were expensive and she didn’t want to be out that amount of money. But she loves to shop and thinks of lost luggage as a message from on high that she should buy new clothes on a trip, so she never springs for lost luggage coverage.

Some of the most common trip insurance coverage options:

• Trip cancellation. If you, one of your traveling companions or a member of your family has a medical condition that can flare up unexpectedly, you should consider trip insurance to protect you in case you need to cancel your trip for medical reasons. Cancellation coverage may also protect you if something comes up and you can’t take off work, or in case, God forbid, a family member passes away. 
• Flight cancellation. If your departure flight is canceled and you spend the first day of your trip at the airport, trip insurance can pay for a new flight or reimburse you for the price of the first day at the resort you didn’t even reach until day 2 of your trip.
• Medical emergencies. If something happens on your trip and you need medical treatment, you could pay a small fortune for out-of-network treatment or a medical evacuation. This can be especially critical on cruise ships flying under a foreign country’s flag, as your U.S. health insurance may not cover you there.
• Terrorism. It’s a sad reality, but in today’s world, we never know where the next terrorist attack is going to be, and such an attack could mean you have to cancel your planned vacation. Or it could leave you stranded somewhere with closed airports or borders.
• Missed connections. If your flight is delayed and you miss the second leg of your flight or you arrive for your cruise after the ship has already departed, trip insurance can help you get another flight to take you where you need to go.
• Missing luggage. If you opt for luggage coverage, you can be reimbursed for the cost of new clothes and new baggage. If you pack medications in your checked baggage, this coverage is a good idea to cover costs of an emergency prescription when you reach your destination.
• Lost or stolen passport. With this coverage, you’ll be reimbursed for the cost of replacing your passport and expediting its delivery so you can travel home.
• Death or dismemberment. I know that sounds overly dramatic, but it’s the actual name of one type of trip insurance coverage – accidental death or dismemberment (AD&D) insurance – you can buy. This coverage helps your family in case you or a loved one dies or suffers a serious permanent injury while traveling.

When you don’t need trip insurance

• A low-cost trip. You’re staying with family or friends at your destination, so a cancellation would only cost you the price of your plane ticket. In this case, if the flight wasn’t terribly expensive, you may decide to just take your chances. It all comes down to how much money you can stomach losing. Basically, are you willing to gamble the amount of your plane ticket? If so, skip the insurance and cross your fingers.
• Your credit card already provides trip insurance. Some credit cards offer some trip insurance coverage as a perk of your credit card. Be sure to check the details of your card’s coverage ahead of time so you know what’s covered and what isn’t, because every card is different. 
• Your medical insurance already covers any potential medical emergencies. Check your health insurance plan to see what coverage you have when traveling internationally to ensure that you can be treated if anything happens and that you can get transit back home, if necessary. Even if you’re traveling within the U.S., your regular health plan may cost more if you use out-of-network providers.