Ed Perkins on Travel: Travel insurance, part 1: Need it?

No matter where you get your information on travel, you have surely been bombarded with “tips” that you need to buy travel insurance. Maybe yes, maybe no. What you should do for sure is review your plans carefully to see whether you need travel insurance, and if you do, figure out exactly what you need — what kind to buy and where to buy it. I’ll try to help.

Money, not experience. Like almost all insurance, travel insurance is designed to insulate you from the risk of losing money. It can’t either avoid or fix a problem; all it can do is make sure you don’t lose a lot of money when a problem arises. When you plan a trip, you face three big financial risks — maybe adding up to thousands of dollars — if your plans are disrupted:

Cancellation. If you have to cancel a trip before you leave home, you risk losing prepayments and deposits that are either totally nonrefundable or carry a big cancellation penalty. Trip-cancellation insurance (TCI) addresses these risks.

– TCI covers you if you, a traveling companion, or a close family member who remains at home suffers an accident or becomes sick before or during your trip. Many policies exclude problems arising from a pre-existing medical condition, but you can usually waive that limitation by buying insurance within a week or two of making your first payment.

– TCI also covers you if a specified event at your destination prevents you from visiting.

Interruption. If something happens during your trip that requires you to return