How Travel Insurance Works

A flight insurance policy can be had for $10. See more pictures of airplanes.
Photographer: Jenny Woodworth | Agency: Dreamstime

The question of whether or not to purchase travel insurance isn't easily answered. Some people throw caution to the winds and never get any insurance at all, much less travel insurance. Of course, these same folks may end up in debt for life if they're ever in a disabling accident. Travel insurance poses some new questions -- some vacations are low risk and cost very little money and therefore probably aren't worth insuring. A vacation that includes hang gliding on a remote island during hurricane season, on the other hand, may be worth insuring. If you're prone to injury, illness or flat-out bad luck, you might want to consider insuring your trip as well.

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Your personal insurance carrier, your credit card company, travel insurance specialists and travel agents all offer forms of travel insurance. It's important to note that many things related to your vacation may already be covered through your auto or health insurance, or your credit card. There's also a fair amount of tricky fine print and enough bad deals out there to make the casual traveler skeptical about purchasing the extra insurance. And sometimes filing a claim isn't as easy as you'd like.

A simple flight insurance policy can be had for as little as $10, covering you in the event of death by plane crash -- how's that to lift your s­pirits? Other more comprehensive policies fall in the range of 3 to 8 percent of the total cost of your trip. It all depends on what kind of coverage you want. The good thing about travel insurance is that it's so flexible. You can find out what you're already covered for and then order a la carte from the insurance menu.

So which variety of travel insurance should you choose? Or should you even bother with it at all? We aim to clear up these issues and provide you with the information you'll need to answer this question on your own. We'll walk you through the different types of insurance offered, give you some tips on how to get the best deal, explore some new options in the industry and get to the bottom of what your credit card covers.