Almost 4 out of 5 travelers impacted by medical conditions, natural disaster or carrier-caused delay did NOT have travel insurance.

When planning the trip of a lifetime, travel insurance seems like a no-brainer. On the other hand, if you’re also afraid of wasting money on coverage you don’t need, the question becomes more complicated. One type of insurance might not reimburse everything. Before you buy, it’s important to consider factors such as the cost of your trip and the likelihood of cancellation.

Why Bother if I’m Not Cancelling my Trip?

If you booked a cheap flight across the country, you probably don’t need coverage. Travel insurance is for an expensive plane ticket and so much more. Not only does it pay off if you’re going on a pricey trip, you could also secure reimbursement for your luggage or your medical coverage in a foreign land. Think of what would happen if you got sick right before your vacation, lost your luggage, or someone stole your wallet with your passport inside. You destination might also suffer from natural disasters or an act of terrorism. The U.S. Travel Insurance Association announced that only ten percent of Americans bought coverage before 9/11. After, that number rose to thirty percent.

Insurance will make you feel better especially when there’s a big down payment, like if you’re booking a cruise or a travel package. Seventy percent of people who go on cruises buy it. When selecting cruise or other vacation packages, there’s an insurance that covers you if the transportation company goes out of business – whether it be the airline, cruise line, etc. This is a smart option, but make sure to buy it from a different company than your transportation provider. Your cruise line’s insurance probably won’t be any good if the said cruise line goes out of business.

You Need Travel Insurance

Little-Known Policies

Many people don’t know about the wide array of specialty coverages that exist. For instance, have you heard of “excess valuation?” It relates to missing or damaged luggage, which often isn’t reimbursed for the whole amount – especially when flying overseas. An outdated Warsaw Convention ruling set the rate at $9.07 per pound and $400 for carry-ons. That doesn’t help if you’re carrying lightweight valuables such as important documents or laptop computers. You might not receive as much as you think even when traveling domestically. For the past ten years, the maximum you can receive from airlines has been set at $3,000…and they rarely pay out the limit. Now there is a plan (with a rate of around $1 to $100) which pays you $5,000 on top of that.

Another lesser-known insurance, even among travel-insurance buyers, is “Medical Evacuation and Repatriation.” Most of the time your current health plan doesn’t apply when you’re on a cruise ship or visiting another country. This insurance program has an annual premium of around $300 and will cover you if you get sick or injured while traveling abroad.

Another key benefit to this plan is having an advocate if you’re admitted to a hospital in a developing country. While they’ll treat you, they won’t discharge you until you pay, and they might overcharge you because you’re American. Your travel insurance company will back you up.

Other Insurance Tips

Using your credit card to pay for your trip? If you do, the credit card company might already cover basics like your rental car, flight accident or partial lost luggage. The best way to figure out the exact terms is to call up the company and ask. Other additional insurances to look into are golf travel insurance for missing equipment and adventure or extreme sports travel. Also read the fine print whenever buying any type of insurance, especially for terrorist acts or a travel warning from the U.S. State Department. Don’t be afraid to ask your travel agent any questions that come up.