Should I Buy Travel Insurance or Skip It?
If your general opinion of vacation insurance is that it’s a rip-off, consider this: Getaways don’t always go as planned, as anyone waylaid by the Icelandic volcanic-ash cloud last April could tell you. And travel coverage can soften the (financial) blow. A comprehensive package, which typically costs 4 to 8 percent of the cost of the trip, reimburses you for unexpected hotel stays, medical emergencies, charges for interrupted or canceled trips, and lost or damaged luggage. Although it may not make economic sense to get a policy for routine or short-distance domestic travel, consider buying one any time you’re required to make a big deposit ($1,000 or more) or prepay for travel services that come with a hefty cancellation penalty.
To obtain the most thorough coverage, buy the insurance within 7 to 21 days of your first trip payment and go through an independent insurance provider. If you ultimately decide to skip the insurance or you’re taking a last-minute trip and it’s too late to buy a policy, remember that you may have a minimum level of protection through your home owner’s or renter’s insurance or the credit card you used. Contact your provider for details.