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What type of travel insurance do you need?

With the combination of political unrest, financial troubles of major tour operators and airlines, and the prevalence of nonrefundable airline tickets, more travelers have purchased travel insurance to protect themselves against unforeseen events that may impact their plans.
Image: A woman wheels her bags into the American Airlines terminal at Newark International Airport
With airline problems, weird weather and other surprise circumstances, more travelers are purchasing travel insurance to protect themselves against unforeseen events.Mike Derer / AP
/ Source: Independent Traveler

With the combination of political unrest, financial troubles of major tour operators and airlines, and the prevalence of nonrefundable airline tickets, more travelers have purchased travel insurance to protect themselves against unforeseen events that may impact their plans.

There are several different types of travel insurance policies available, ranging from trip cancellation insurance to emergency medical evacuation, all of which vary widely by company in what their coverage includes and how much it costs.

Make sure you know exactly what your policy will and will not cover before you purchase anything. See Traveler's Ed for help decoding your insurance policy in Travel Insurance: The Fine Print. Do You Need Insurance?

If you're asking yourself whether you need to buy travel insurance for an upcoming trip, first look at the insurance policies you already have to see what they will cover. Some medical insurance policies will cover medical emergencies overseas while others will not. Many homeowner's policies cover baggage loss. Also, many credit card companies (particularly gold cards) offer their members baggage loss, international medical assistance, and accidental death and dismemberment insurance if they simply charge their airline tickets on their credit card or for a small additional fee.

Since September 11, 2001, many are looking to travel insurance to safeguard their trip against any unforeseen terrorist attacks at their destination. Many policies now have an "Acts of Terrorism" clause that will reimburse you if you miss or are delayed in getting to your origination or ending destination because of acts of terrorism.

When considering trip cancellation insurance, take time to think about how much money you'll be putting down before your trip. Are you purchasing expensive airline tickets that can't be refunded? Are you putting down a large nonrefundable deposit on a cruise or tour? If the answer is yes, or if you might cancel for any reason, then buying trip cancellation insurance might be a prudent idea.

If you're an adventure traveler who has paid $3,000 up front for a white water rapids package deal in a remote area of South America and you won't receive any refund if you cancel, then you might want to consider both trip cancellation and emergency medical evacuation insurance.

If you are a student, a teacher or a young person aged 12 - 25, one of the best deals around is STA Travel's international travel insurance. Premiums start at $48, and cover items such as hospital stays, accident medical expense, emergency evacuation, accidental death and dismemberment, repatriation of remains, passport protection and baggage delay insurance. The company also offers inexpensive coverage for domestic trips.

Types of insurance
Following is a brief description of the different types of travel insurance options available. Note that every policy is a little bit different, so be sure to read the fine print carefully before purchasing any travel insurance.

Trip cancellation/interruption insurance covers you if unforeseen events cause you to cancel or interrupt your trip. In general, this coverage is meant for illness, injury or death suffered by the insured or a member of the insured's immediate family. Some policies also cover cancellation in the event of illness, injury or death to the insured's travel companion. Most policies exclude trip cancellation in the event of war, civil disturbance or a change in your own financial circumstances. (Lose your job before your trip? You're probably out of luck.) Some policies also exclude travel to specific destinations which are prone to political unrest.

Many comprehensive travel insurance policies now include coverage if your tour operator defaults; however, it is important to understand exactly what is covered by your policy. If you buy a policy directly from a tour provider, usually it does not cover the default of that provider — so it's usually a good idea to purchase your policy from an independent company. Some policies only cover tour operator default if the operator ceases operations entirely, which they may not do even if they file for bankruptcy.

Some travel insurers are now offering comprehensive "cancel for any reason" policies. You can find more information on several such policies at

Medical insurance encompasses several types of coverage. Emergency medical evacuation insurance covers the cost of transportation if a qualified physician determines that you must be evacuated for medical treatment to the nearest medical facility or to the United States (if it's warranted), due to a physical injury or sickness. This insurance is highly recommended for cruise passengers and adventure travelers visiting remote areas.

For example, if you fall and are injured while trekking in the Himalayas, you might need to be evacuated by private helicopter, then airplane — which can get quite expensive. Emergency medical evacuation back to the United States without insurance can easily cost $35,000 or beyond.

Other types of medical insurance include:
A telephone number/service you can call that will direct you to English-speaking doctors while you are overseas. In some cases they will also provide a physician monitoring service, where a qualified physician from the U.S. will monitor the treatment you are receiving by a local physician via telephone.

Cash payment to the insured or beneficiary in the event of accidental death, loss of sight or loss of limb.

Reasonable expenses for repatriation of the insured's remains in the event of death.

Keep in mind that in nearly all cases you will need to pay up front for your medical services, and then your insurance company will reimburse you later, once you've made a claim.

Before purchasing a travel insurance policy with medical coverage, be sure to check what your regular medical insurance does or doesn't cover while you are traveling out of the area, particularly when traveling overseas. You should also consider the medical care offered at your destination. Many Western countries have excellent socialized medical care available and you may not even be charged for the care you receive. On the other hand, if you're in a remote area of a developing country and need to be evacuated for adequate medical care, the expenses can mount quickly.

Read the fine print regarding coverage or lack thereof for preexisting conditions. Generally any medical problem that arises within 60 days prior to purchasing the policy is not covered; however, there are some exceptions to this.

Baggage loss and delay coverage protects you in the event that your luggage is lost, delayed or stolen. This often includes a cash payment if your bags are delayed for more than 12 hours after you arrive at your destination.

Flight delay or cancellation insurance (sometimes called "travel delay") typically pays for accommodations, meals and new travel arrangements once you've been delayed a certain amount of time (often 6 or 12 hours — read your policy carefully).

Travel document protection kicks in to help you replace a passport or other travel documents when they're lost or stolen.

Annual insurance
If you travel many times a year (particularly internationally), it may be more economical to purchase annual insurance instead of individual policies for each trip. Annual insurance may also be a good idea if you regularly travel to developing countries, even if it's only a few times a year.

Most annual policies provide medical evacuation coverage, benefits in the event of loss of life or limb, as well as minimums for lost luggage and treatment costs for illness or injury. These policies typically do not include trip cancellation coverage, but in some cases you may add this for an additional fee.

The Independent Traveler is an interactive traveler's exchange and comprehensive online travel guide for a community of travelers who enjoy the fun of planning their own trips and the adventure of independent travel. You can access our wealth of travel resources and great bargains here at , or at .