Its summertime, and many Americans are looking forward to much-needed vacations. As they book their flights or reserve their hotel rooms, theres a good chance someone will ask them the following question:

Would you like to add travel insurance to protect your trip?

A number of folks jump at this offer, out of fear or simply out of impulse, and the US Travel Insurance Association estimates that about $1.9 billion in policies are sold annually, according to the most recent numbers.

So should you add travel insurance to your trip? And if so, what should you look for in a policy?

Types of Travel Insurance Coverage

The good news is that providers offer a menu of services, from which consumers pick and choose.

Some of the most common options:

oMedical. If you have ever come down with a bad stomach bug and got frustrated locating a gastroenterologist in your hometown, just imagine that search in the jungles of Cambodia. Medical travel insurance can help provide coverage to limit out-of-pocket costs.

oEvacuation. If youre abroad and must deal with a natural disaster or political unrest, getting to a safe place in a strange land is a harrowing experience. It can also be incredibly expensive. Travel insurance can help cover the cost of getting out of harms way.

oCancellation. More painful than suffering a last-minute injury that ruins your trip can be the realization that you cant get back the big bucks you paid for travel arrangements or a tour. This kind of travel insurance also covers cancellations due to other problems, including if your tour provider goes bankrupt or an airline delay causes you to miss your event.

oBaggage. Nothing ruins a vacation faster than lost, damaged or stolen luggage. But at least being covered will provide some reimbursement for that new bathing suit youre forced to buy upon arrival.

oDeath and dismemberment. Similar to typical life insurance, this option provides your heirs with a payout should you die during your trip.

Should You Buy Travel Insurance?

If youre a worrier, its difficult to put a price tag on peace of mind. But even the most nervous of travelers should think twice about certain areas of travel insurance, because the benefits are extremely limited or because you may be covered elsewhere.

The easiest one to pass on is death coverage, sometimes referred to as crash insurance. Plane crashes are so rare that even a small charge for this kind of coverage isnt worth it. Besides, if youre a young parent truly worried about your own mortality, a good term life insurance policy is probably the way to go.

A bit more complicated but worth looking into is the question of whether you are already covered.

Dig into the details of your destination with your health insurer. I was encouraged to learn that my personal CareFirst insurance would cover me at about 60 different hospitals around Antwerp, Belgium. Good to know for when I plan my European tour!

Its also worth exploring any insurance coverage you may have as part of your credit card. American Express is well-known for its perks, for instance, and some premium cards offer coverage for lost luggage or flight cancellations — as long as you swipe your AmEx to pay for the trip, of course.

Then theres the question of just what youre insuring.

For instance, the US Department of Transportation limits lost baggage claims to $3,300 — and when airlines do reimburse you, it always accounts for depreciation. So your skis or golf clubs may be worth covering with travel insurance. But a small bag with a bikini and sandals? Maybe not.

The same is true for medical insurance or evacuation. If youre going bungee jumping, it might be wise to take out some extra insurance — and some providers have a specific clause for adventure sports. But if your worst risk is not applying enough sunblock at the beach, thats a different story.

How to Buy Travel Insurance

Rates can vary widely. Thankfully, many websites offer easy-to-surf ways to quickly compare coverage and costs.

Two of the big ones to check out are SquareMouth.com and InsureMyTrip.com, which are like online travel sites that aggregate a bunch of different options form third parties and leave it up to you to pick. You can screen for extremely comprehensive coverage, or simply select the areas youre interested in. For example, if youre roughing it in the wilds of South America, you might not fret about cancellations or your luggage, and only want coverage for emergency medical transportation. Its much cheaper to pick and choose custom coverage this way.

Another option is WorldNomads.com, where you can quickly get pricing for a comprehensive package by typing in info about your trip. You dont get to pick and choose your coverage areas or limits. However, as a basic package, the trip insurance is pretty affordable.

Another option, of course, is to buy travel insurance from your travel agent. But keep in mind that these folks often get a commission, increasing the cost to you, and you may be limited to only the options they have instead of the coverage you need.

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