Travel Insurance is important, and everybody should take a look at it, before hitting the road. The right insurance can easily spell the difference between a cheap flight and a financial disaster. On the other hand, many people buy insurance, which is under their circumstance useless. Or, they buy insurance coverage which they already have through their credit card.

There are three general types of travel insurance you should consider, if you are planning a trip:

1. Health related insurances covering the risk of sickness or an accident on the road
2. Luggage Insurance
3. Insurance covering change or cancellation penalties

I want to make a few points for each category.

Travel Health Insurance
You want to have coverage of medical expenses at home. On the road you need it even more. The first step before buying special health coverage for your trip is a check of the policy of your existing health insurance. On the road you need treatment costs, including hospitals, and transport back home, to be covered. Very helpful is an emergency phone number, where you can reach somebody familiar with the country you are in. He may know the right doctors, have an idea which hospitals are good, and have a relationship with them. This may allow a settlement eliminating the need to pay the hospital before you are admitted.
But please check the fine print. Mental conditions are almost always excluded from coverage. If you have an address in the country you visit, or if you are a citizen of the country you visit, travel insurance coverage may also be declined.

Luggage Insurance
This type of travel insurance is straightforward. If your luggage gets damaged or lost during transportation, you will be refunded. But check the fine print for excluded items. Expensive gear, like computers, cameras, jewelry and obviously cash are excluded. There may be also provisions that you cannot leave your luggage in a car, or that some items need to be kept in a safe etc.

Insurance Covering Change Penalties
A classic form of travel insurance covers the costs of changing or cancelling a trip for a predetermined set of reasons. The triggers may include sickness, pregnancy, death of a family member, unexpected unemployment and more. Check the policy of any insurance for these triggers, because they are not always the same.
Before insuring against a change penalty you need to have a hard look, whether you really need it. The trick is that insurance premiums are determined by the price you pay for your ticket or vacation package. But, on the other hand, penalties for changing or cancelling a ticket are generally lower for higher priced flights and packages. This means, if you do not take care, you may pay 50 Dollars to cover a risk of 100 Dollars in case you need to cancel your travel project. This does not make sense.
But it is also possible, that a policy of no change allowed and no refund policy is connected to your ticket. In this case, you may lose the whole price you paid for your package, if you become sick a few days before you travel. Under such rules travel insurance covering change and cancel penalties make definitively sense.

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