Insurance

Check your existing insurance policies and credit-card coverage before you buy travel insurance. You may already be covered for lost luggage, cancelled tickets, or medical expenses.

The cost of travel insurance varies widely, depending on the cost and length of your trip, your age and health, and the type of trip you're taking, but expect to pay between 5% and 8% of the vacation itself. You can get estimates from various providers through InsureMyTrip.com. Enter your trip cost and dates, your age, and other information, for prices from more than a dozen companies.

Trip-Cancellation Insurance

Trip-cancellation insurance will help retrieve your money if you have to back out of a trip or depart early, or if your travel supplier goes bankrupt. Permissable reasons for trip cancellation can range from sickness to natural disasters to the State Department declaring a destination unsafe for travel. (Insurers usually won't cover vague fears, though, as many travelers discovered when they tried to cancel their trips in October 2001.) In this unstable world, trip-cancellation insurance is a good buy if you're purchasing tickets well in advance -- who knows what the state of the world, or of your airline, will be in 9 months? Insurance policy details vary, so read the fine print -- and make sure that your airline or cruise line is on the list of carriers covered in case of bankruptcy. A good resource is "Travel Guard Alerts," a list of companies considered high-risk by Travel Guard International. Protect yourself further by paying for the insurance with a credit card -- by law, consumers can get their money back on goods and services not received if they report the loss within 60 days after the charge is listed on their credit card statement.

For more information, contact one of the following recommended insurers: Access America (tel. 866/807-3982; www.accessamerica.com); Travel Guard International (tel. 800/826-4919; www.travelguard.com); Travel Insured International (tel. 800/243-3174; www.travelinsured.com); and Travelex Insurance Services (tel. 888/457-4602; www.travelex-insurance.com).

Medical Insurance

For travel outside your country, most health plans (including Medicare and Medicaid) do not provide coverage, and the ones that do often require you to pay for services upfront and reimburse you only after you return home. Even if your plan does cover treatment in other countries, Canadian hospitals make you pay your bills up front, and send you a refund only after you've returned home and filed the necessary paperwork with your insurance company. As a safety net, you may want to buy travel medical insurance. If you require additional medical insurance, try MEDEX Assistance (tel. 410/453-6300; www.medexassist.com) or Travel Assistance International (tel. 800/821-2828; www.travelassistance.com; for general information on services, call the company's Worldwide Assistance Services, Inc., at tel. 800/777-8710).

Lost-Luggage Insurance

On international flights (including U.S. portions of international trips), baggage coverage is limited to approximately $9.07 per pound, up to approximately $635 per checked bag. If you plan to check items more valuable than what's covered by the standard liability, see if your homeowner's policy covers your valuables, get baggage insurance as part of your comprehensive travel-insurance package or buy Travel Guard's "BagTrak" product. Don't buy insurance at the airport, where it's usually overpriced. Be sure to take any valuables or irreplaceable items with you in your carry-on luggage, because many valuables (including books, money, and electronics) aren't covered by airline policies.

If your luggage is lost, immediately file a lost-luggage claim at the airport, detailing the luggage contents. Most airlines require that you report delayed, damaged, or lost baggage within 4 hours of arrival. The airlines are required to deliver luggage, once found, directly to your house or destination free of charge.

Car-Rental Insurance

Ask your insurer if your coverage extends to Canada, and be sure to find out whether your policy covers all persons who will be driving the rental car, how much liability is covered in case an outside party is injured in an accident, and whether the type of vehicle you are renting is included under your contract.

Most major credit cards provide some degree of coverage as well -- provided they were used to pay for the rental. Terms vary widely, however, so be sure to call your credit card company directly before you rent. Note: If you rely on your credit card for coverage, you may want to bring a second credit card with you, as damages may be charged to the first card, maxing out your limit, and you may find yourself stranded unless you have a backup credit card.

You can buy car-rental insurance from an auto rental agency. The basic insurance coverage offered by most car-rental companies, known as the Loss/Damage Waiver (LDW) or Collision Damage Waiver (CDW), can cost as much as $20 per day. It usually covers the full value of the vehicle with no deductible if an outside party causes an accident or other damage to the rental car. Liability coverage varies according to the company policy. If you are at fault in an accident, however, you will only be covered for the full replacement value of the car, not for any liability.

Most rental companies will require a police report in order to process any claims you file, but your private insurer will not be notified of the accident.