Insurance

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

The cost of travel insurance varies widely, depending on the rate and length of your trip, your age, your health, and the type of trip you're taking, but expect to pay between 5% and 8% of the vacation itself.

Trip-Cancellation Insurance

Trip-cancellation insurance helps you get your money refunded if you have to back out of a trip, if you have to go home early, or if your travel supplier goes bankrupt. Allowed reasons for cancellation can range from sickness to natural disasters to the State Department declaring your destination unsafe for travel. (Insurers usually won't cover vague fears, though, as many travelers discovered who tried to cancel their trips in Oct 2001 because they were wary of flying.) In this unstable world, trip-cancellation insurance is a good buy if you're getting 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 (see website below). 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.

Note: Many tour operators, particularly those offering trips to remote or high-risk areas, include insurance in the cost of the trip or can arrange insurance policies through a partnering provider, a convenient and often cost-effective way for the traveler to obtain insurance. Make sure the tour company is a reputable one, however: Some experts suggest you avoid buying insurance from the tour or cruise company you're traveling with, saying it's better to buy from a "third party" insurer than to put all your money in one place.

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); or Travelex Insurance Services (tel. 888/457-4602; www.travelex-insurance.com).

Medical Insurance

For travel overseas, 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 overseas treatment, most out-of-country hospitals make you pay your bills upfront, 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, particularly if you're traveling to a remote or high-risk area where emergency evacuation is a possible scenario. 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 Travel Assistance services, call the company's Worldwide Assistance Services, Inc., at tel. 800/777-8710.

Lost-Luggage Insurance

On domestic flights, checked baggage is covered up to $2,500 per ticketed passenger. 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 the standard liability, see if your valuables are covered by your homeowner's policy, 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, as it's usually overpriced. Be sure to take any valuables or irreplaceable items with you in your carry-on luggage, as 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. For most airlines, you must 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.