Everything you ever wanted to know about travel insurance (but were afraid to ask)

Editor’s note: This is part one in a series of posts about travel insurance. It is sponsored by Access America and researched with assistance from the US Travel Insurance Association, a trade organization. Here’s more information about sponsored posts.

Elliott Advocacy is underwritten by Travelex Insurance Services. Travelex Insurance Services is a leading travel insurance provider in the United States with over 55 years combined industry expertise of helping people dream, explore and travel with confidence. We offer comprehensive travel insurance plans with optional upgrades allowing travelers to customize the plans to fit their needs. Compare plans, get a quote and buy online at Travelexinsurance.com.

Do you need travel insurance?

A good policy can offer you peace of mind for your upcoming vacation.

If something goes wrong – if your trip is interrupted or if you have to cancel – you can recover some or all of your costs.

About 1 in 3 travelers buy insurance for their trip, according to the US Travel Insurance Association. Should you be one of them?

Before taking out a policy, it’s important to determine whether you need protection at all.

Buy it:

If you’re spending more than $10,000 on a vacation. That’s known as a “big ticket” purchase, and it should be insured.

If you’re a nervous traveler, and just need the peace of mind that comes with a policy. Even if you can’t recover all of your money, you may still be able to take advantage of certain benefits, like trip interruption coverage.

If you’re cruising or taking a package tour. Cruise lines used to be flexible, when it came to allowing passengers to rebook missed cruises. Tour operators were also more lenient. Not anymore. A policy can protect you.

If you have a complex or lengthy itinerary. If you’re on a tour with a lot of moving parts, then insurance could be useful. When one part doesn’t go as planned, the right policy can help you make a quick recovery.

Anytime when you leave the country. Medical providers outside the U.S. often ask for “upfront” payments for medical services that can cost thousands of dollars, and travel insurance can guarantee these payments. (This is also true for medical evacuations, which can cost tens of thousands of dollars.)

If you’re on Medicare and are traveling internationally. You’ll want to consider a policy that includes medical expenses, since Medicare doesn’t typically cover events outside of the country.

Skip it:

If it’s a short, simple and inexpensive trip within the United States.

If you’re spending less than $10,000 or if you don’t mind losing the value of your trip should something happen before or during your vacation. Also, if you have insurance that would cover a medical emergency or medical evacuation, you may not need a policy.

If your trip includes components that aren’t covered by insurance. For example, say you’re staying at a friend’s house, using a voucher or redeeming frequent flier miles for your vacation. Travel insurance would probably be minimally useful. (Some travel insurance policies may cover the cost of redepositing miles when you need to cancel for a covered reason.)

If you have a pre-existing medical condition that wouldn’t be covered. Read you policy carefully; some travel insurance policies do cover existing medical conditions when certain requirements are met. Normally, pre-existing conditions that are controlled are covered if the policy is purchased within a certain time following initial deposit and payment of your trip.

If coverage would be redundant. For example, if your credit card or other insurance would cover the same event — then don’t worry about it. Note that some cards won’t cover items like medical evacuations, so if that’s important, then think about insurance. (Most credit cards do not cover medical expenses, and just about every credit card will not cover for cancellation and interruption.

Next, I’ll show you how to choose the right policy.

Special thanks to Access America for making this series possible, to John Cook at QuoteWright for his insights into the travel insurance industry, and to my sponsors, SquareMouth, Travel Insurance Review, Travel Insurance Services, and TripInsuranceStore, for their support of this site.

(Photo: Eliza veta Tsitovskaya/Flickr Creative Commons)