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 homeowners policies cover Baggage Loss. Also, many credit card companies (particularly gold cards) offer their members Baggage Loss, International Medical Assistance, and Accidental Death & Dismemberment Insurance if they simply charge their airline tickets on their credit card or for a small additional fee.

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

When considering Trip Cancellation Insurance, think about what sort of nonrefundable arrangements you're purchasing for your trip. If you're spending a lot of money for a cruise that is nonrefundable if you cancel for any reason, then buying trip cancellation insurance might be a prudent idea. If you're an adventure traveler who has paid $3000 upfront 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.

Types of Insurance
Following is a brief description of the different types of travel insurance options available and the names of some of the more established insurance companies. Please read the insurance brochure carefully and clarify any questions you have before purchasing any 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 or other hostilities including terrorism, natural disasters and bankruptcy of tour operators. 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. Some policies only cover tour operator default if the operator files for bankruptcy which they might never do even if they default.

If you have an accident or fall ill while on your trip, you will be reimbursed for reasonable medical expenses incurred. Coverage varies widely from policy to policy in this area. In addition, the coverage you seek should depend on 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, you may be in a remote area of a developing country and need to be evacuated for adequate medical care which can get very expensive. 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.

Emergency Medical Evacuation Insurance covers emergency evacuation 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 who are 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 about $35,000.

Emergency Medical Insurance also covers:

-- 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.

-- Covers reasonable expenses for repatriation of the insured's remains in the event of death.

-- Covers loss, damage, and theft of your baggage and personal belongings. Often includes a cash payment if your luggage is delayed for more than twelve hours after arrival at your destination.

Annual Insurance
An annual insurance policy for frequent travelers is also expected to be available early next year. These annual policies are not expected include reimbursement for trip cancellations or interruptions -- one of the biggest sources of claims. The annual premium is expected to be about $150/year, and will provide benefits in the event of loss of life or limb, as well as minimums for lost luggage and treatment costs for illness or injury -- for incidents at least 100 miles from home.

One of the most important inclusions in this form of insurance is the medical evacuation coverage. The cost for such medevac service can be steep, and while the policy will not cover you completely, it will definitely help, paying up to $50,000. It may be a good idea if you travel to high risk areas, even if it's only a couple of times a year.

Insurance coverage varies widely from policy to policy. Prices also vary widely depending on coverage and length of your trip. Trip cancellation insurance alone generally costs about $6.50 per $100 of coverage. For comprehensive plans, expect to pay roughly $100-$200 per person for a trip costing about $2500. Buying only the coverage you really need can significantly reduce your costs in some cases, but shop around to compare prices and coverage. Make sure you read the fine print on all plans so you know exactly what coverage you're buying.

Travel Agent/Nonrefundable Ticket
You can buy insurance on a nonrefundable ticket booked through a travel agent using the Worldspan network. In the event that you are not able to use your nonrefundable ticket, and either do not want to reschedule the trip and pay the $100 change fee, or don't want to take the trip at all, you can be reimbursed for the ticket. The price for this insurance ranges from about $13-$30, depending on the price of the ticket you purchased. Offered through various insurance carriers.

Insurance Companies
Here are some established travel insurance companies. Please read the insurance brochure carefully before purchasing any insurance and make sure the policy you're buying covers the countries to which you will be traveling.