Ensure that you know when to insure

Travel insurance used to be a cottage industry that protected people against the loss of a big-ticket vacation such as a safari or a round-the-world cruise. But the Sept. 11, 2001, terrorist attacks and a series of natural disasters in the early 2000s pushed it into the mainstream. Today, it’s hard to find a travel agent or travel site that doesn’t try to sell an optional insurance policy as part of a trip. But should you buy one? That depends. Here are the most frequently asked questions about travel insurance:

What does travel insurance do?

If something goes wrong on your vacation, you can recover some or all of your costs, depending on the kind of insurance you buy. Most policies cover trip interruptions and cancellations and even acts of terrorism. They can also pay for emergency medical and dental care and, if necessary, a medical evacuation.

What kinds of policies are out there?

A standard travel insurance policy lets you cancel your trip for a covered reason and has significant limitations; the most frequent “gotcha” is an exclusion for any preexisting medical conditions. A “cancel for any reason” policy pays for a percentage of your trip if you decide to stay home.

How much does insurance cost?

A standard policy typically costs 4 to 8 percent of your trip’s prepaid non-refundable price. A “cancel for any reason” policy, however, can run you 10 percent or slightly more. Your policy may be more expensive if you’re older or are engaging in a risky activity that makes a claim more likely.

Do I need insurance?

Maybe. Experts recommend it if your vacation costs $10,000 or more. Also consider a policy if you’re cruising or taking a package tour. (Both have unforgiving cancellation policies, which could result in your losing the entire value of your trip.) If you have a complex or lengthy itinerary, insurance can protect your investment. And you should always think about a policy when you’re leaving the country, when your medical insurance might not cover you.

Where can I buy insurance?

You can buy directly through the insurance companies. The largest are Allianz Global Assistance (formerly Access America), CSA Travel Protection and Travel Guard. You can also buy through a travel agent or a third-party Web site such as Squaremouth, Travel Insurance Review, TripInsuranceStore.comand InsureMyTrip.com. Those sites also make it easy to compare policies.

How do I shop for a policy?

Consult at least two of the three travel insurance sellers. By checking with multiple sources, you won’t just find better terms or prices, you might also avoid buying a potentially useless policy. If you have a question about a policy, check the US Travel Insurance Association Web site or your state insurance commissioner to make sure that it’s legit.

What do I do after buying?

Read the policy immediately. If there’s missing or incorrect information, call your insurance company right away. Many companies offer a 10-day “free look” period. If after reviewing the policy, you decide that it doesn’t meet your needs, you can cancel it and get a full refund as long as you haven’t left on your trip.

What if I have to file a claim?

Your travel insurance company will tell you how. Claims typically take two to four weeks to process, but some complicated ones can take longer. Expect a final decision within roughly a month and no more than two.

What if my claim is rejected?

A rejection isn’t the company’s final word. It means that it can’t honor your claim based on the information provided. Send the company a brief, polite written appeal with any new information you believe is relevant to your case. Most insurance companies have several adjusters at a more senior level review appeals.

If my appeal is rejected, am I out of luck?

No. You can ask the travel agent who sold you the policy for help, contact your state insurance commissioner or, as a last resort, take your case to small claims court. If you strike out there, your claim is probably a lost cause.