Trip Insurance

Comprehensive trip insurance is valuable if you're booking an expensive or complicated trip (particularly to an isolated region) or if you're booking far in advance. Comprehensive policies typically cover trip cancellation and interruption, letting you cancel or cut your trip short because of illness (yours or someone back home), or, in some cases, acts of terrorism in your destination. Such policies usually also cover evacuation and medical care. (For trips abroad you should have at least medical and medical evacuation coverage. With a few exceptions, Medicare doesn't provide coverage abroad, nor does regular health insurance.) Some also cover you for trip delays because of bad weather or mechanical problems as well as for lost or delayed luggage.

Another type of coverage to consider is financial default—that is, when your trip is disrupted because a tour operator, airline, or cruise line goes out of business. Generally you must buy this when you book your trip or shortly thereafter, and it's available to you only if your operator isn't on a list of excluded companies.

Many travel insurance policies have exclusions for preexisting conditions as a cause for cancellation. Most companies waive those exclusions, however, if you take out your policy within a short period (which varies by company) after the first payment toward your trip.

Always read the fine print of your policy to make sure that you're covered for the risks that most concern you. Compare several policies to be sure you're getting the best price and range of coverage available.