Should you get insurance for your upcoming trip?

When booking a holiday getaway, you often have more to consider than the price of an airline ticket and hotel. You also have to decide whether to buy travel insurance, which could be useful if a trip is canceled or delayed because of natural disasters at your destination, such as the wildfires in California or a winter storm.

“Some travel insurance policies also allow you to cancel a trip if your home is damaged by a wildfire or hurricane,” says Julie Loffredi, a spokeswoman for InsureMyTrip.com, a leading travel insurance comparison website.

Terrorism is another reason travelers may want to opt out of a trip. In the wake of terror attacks earlier this year in England and New York, online searches for terrorism coverage are up 49 percent over a year ago, says Steven Benna, a spokesman for SquareMouth, another website that compares travel insurance options.

There are generally three types of policies offered by insurers: basic, midlevel, and premium, with coverage and prices increasing accordingly. Policies that allow you to cancel for any reason give you the most flexibility and the best option to back out over fears about terrorism anywhere in the world rather than just on your itinerary.

If you’re thinking about purchasing travel insurance, here’s what you should consider first:

Choices

If you buy from a travel agent, you’ll probably be offered only one or two policies from one company. Some online travel sites also tend to limit your choices. You can get more options by going to travel insurance comparison websites like InsureMyTrip.com (800-487-4722), which sells hundreds of policies from 29 insurance companies, and SquareMouth (800-240-0369), which offers 110 policies from 25 insurers.

Price

Travel insurance generally costs 5 percent to 10 percent of your prepaid nonrefundable costs. So if your up-front airline tickets, resort hotel, cruise, and/or family tour package add up to, say, $8,000, travel insurance can cost $800. Older travelers may pay more, along with those taking longer trips or opting for more comprehensive coverage or the cancel-for-any-reason protection. The best way to make sure you aren’t overpaying is to shop around.

Whether the policy offers a waiver for a pre-existing medical condition

Unexpected injury and illnesses are usually covered. But if you consulted a doctor about a problem 60 to 180 days before your trip and that problem arises after you pay for your travel expenses, that would be considered an excludable pre-existing condition.

To be eligible for a pre-existing medical condition waiver, buy your travel insurance within 10 to 14 days of making your first payment for your travel, says Jim Grace, CEO of InsureMyTrip.com.

Whether the policy provides healthcare coverage

U.S. health insurance coverage for travel overseas varies by insurer and plan, so you must contact your carrier to get the details of your specific policy, says Cathryn Donaldson, a spokeswoman for America’s Health Insurance Plans, a trade association. In general, Medicare does not cover you outside the U.S., but Medicare supplemental policies might.

So travel insurance could be useful for healthcare benefits. Although most trip cancellation/interruption coverage requires a small deductible or none at all, travel healthcare coverage gives you the option of a zero to $1,000 deductible. Of course, the lower the deductible, the higher the premium.
Likelihood you might need medical evacuation: The more adventurous and remote your travel plans are, the more it will cost to transport you to competent medical treatment. A commercial flight with a rescue nurse can cost $10,000 to $50,000, and an air ambulance can cost $20,000 to $250,000, depending on the departure point and destination as well as medical complexity, says William Siegart, M.D., chief medical officer of On Call International, one of the major services providing medical evacuations.

On Call arranges medical evacuation for ill and injured travelers 24/7/365 to a worldwide network of 4,000 medical centers via numerous air ambulance and commercial medical transport providers.

Whether the policy offers coverage you don’t need

“Don’t buy insurance that covers small, manageable losses or only a slice of risk,” says Bob Hunter, director of insurance for the Consumer Federation of America. For example, losing some of your belongings won’t break you financially, so keep a close eye on your valuables and be ready to accept losing less valuable stuff.

If you’re worried about dying in a plane crash, buy term life insurance, which covers you no matter how you die as long as your policy is in force, rather than flight insurance, which only pays benefits if you die in a plane crash and covers you only for the short time you’re flying.