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Can someone explain travel insurance to me?

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I've never gotten travel insurance before, but am considering it for a trip next summer (2012, seven months from now). Most of the threads here talk about medical evacuation insurance, or car insurance, or insurance for belongings - none of which I would need. All I would be looking for was to get back the cost of the air fare, and whatever hotel deposits/payments I'd made that were not refundable should I need to cancel the trip at the last minute. I would be booking the flights now, and then reserving hotels, maybe train tickets sometime during the next several months. Most of the insurance I've seen on-line talks about having to purchase the insurance within a certain amount of time after you pay for the trip. But I'll be 'paying' for the trip over a period of months, as I book things, not buying one pre-packaged trip. The total amount we'd be spending would be probably less than $2000 each (husband and self) before the trip (so that's the amount I'd want to insure). But there is a higher than normal (for us) likelihood that we might need to cancel this trip so if I could insure that $4000 or so I would do it.

So - is insurance like that even possible? Is it 'worth' it? I've looked at several on insuremytrip.com and they don't make any sense. Can anyone suggest a company that does this?

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