by HL Borden

Created on: September 16, 2008   Last Updated: August 04, 2009

I am a finger click away from booking my last-minute $650 round-trip flight from San Diego to Greenville, South Carolina. The website asks if I would like to purchase travel insurance for an additional fee. I quickly decline. I am sure that this itinerary works for me. The trip is only a week away. What can possibly go wrong?

Jump to one week later. The wife has unexpectedly been called in to work, both the kids are in bed sick with the flu, and the dog has developed a sudden fear of being left alone. My much-needed vacation has to be cancelled. Now I'm out $650!

It is said that hindsight is 20/20. Well, hindsight tells me that if I had just paid the small fee for travel insurance, I wouldn't be out more than $600 right now. If I had opted for the travel insurance, I would have been reimbursed the cost of my ticket due to the last minute cancellation.

Cancellations are not the only expense travel insurance protects against.

Often purchased at the time of booking, travel insurance can cover both travels in your own country and abroad. It is intended to cover such things as money invested in non-refundable payments, the costs of medical expenses, and other losses incurred while traveling. A comprehensive plan will cover you on all these levels.

For instance, if you need to return home mid-trip, the costs of non-refundable items such as hotels and rental cars will be covered, as well as the additional expenses that may be incurred due to changing flight plans. If your trip is cancelled altogether, the insurance will often cover your non-refundable plane ticket. In the unfortunate event where you need medical assistance on your trip, the costs of medical expenses will be taken care of. It even often includes a portion of the cost of emergency evacuation and air lifts in the event of a serious accident.

Some situations where travel insurance is highly recommended are if you have complex plans (missing a flight will cause you to miss your cruise which will cause you to miss your hotel reservation which will cause you to miss...); your trip is a year or more in the future (leaves a lot of time for plans to change, illnesses to crop up, and things to go wrong); or the trip is very expensive (you have more at risk than you can afford to lose).

Expect to spend 3% to 7% of the cost of your trip for good coverage. Senior citizens should budget their travel insurance to be roughly 15% of the total cost. This fee is small when compared to the peace of mind you will receive in knowing that, if anything should happen, you will be covered financially.

One final caveat: it is very important to read the fine print of the travel insurance package you are purchasing as benefits and exclusions vary greatly between providers.

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