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Should I buy travel insurance?

Travel insurance refers to various types of specialized coverage you can buy to insure yourself against the many risks you face as a traveler. You can purchase this insurance from insurance companies, travel agents, tour operators, cruise lines, rental companies, or travel assistance companies. Coverage, cost, and terms vary widely.

There are many different types of travel insurance:

  • Trip cancellation or interruption insurance protects you if your trip is canceled or interrupted because of some unforeseen event, such as the financial failure of the cruise line, airline, or travel agency; bad weather; illness; or death.
  • Temporary health policies provide short-term supplemental health insurance coverage. This type of coverage may be helpful when you're traveling abroad, since some health insurance providers do not cover you while traveling overseas, or they may provide only limited coverage.
  • Baggage insurance reimburses you if your personal belongings are permanently or temporarily lost, stolen, or damaged while you are traveling.
  • Accidental death and dismemberment (AD&D) insurance compensates you if you lose a limb or an eye, or compensates your beneficiary if you die in an accident. You can purchase this coverage as a separate policy, as a rider to an existing policy, or as part of a travel insurance policy.

You may want to consider purchasing some form of travel insurance if the financial benefit and peace of mind outweigh the premium cost. For instance, if your trip were canceled or the tour operator went out of business, could you afford to lose the money you paid for the trip? If you got sick while vacationing in a foreign country, would your health insurance cover you? If not, could you afford to pay for your medical expenses? If your luggage were lost, could you afford to purchase everything you would need to continue your trip? These are important questions to consider when deciding whether or not to purchase travel insurance.