Insurance

Check your existing insurance policies and credit card coverage before you buy travel insurance. There are no major natural disasters such as hurricanes or earthquakes that could upset your plans to visit Panama. Unforeseen costs such as lost luggage and medical expenses are your major concerns. Also, rental-car companies charge a mandatory $12 per day for liability insurance, but you are most likely covered by your credit card for other insurance costs, and therefore you can save a bundle on rental rates. Know what you're covered for before you rent, and what you need in order to make a claim.

The cost of travel insurance varies widely, depending on the cost and length of your trip, your age, your state of 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 you retrieve your money if you have to back out of a trip or depart early, or if your travel supplier goes bankrupt. Permissible reasons for trip cancellation can range from sickness to natural disaster to the State Department declaring a destination unsafe for travel.

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).

Travel In The Age Of Bankruptcy -- Airlines go bankrupt, so protect yourself by buying your tickets with a credit card. The Fair Credit Billing Act guarantees that you can get your money back from the credit card company if a travel supplier goes under (and if you request the refund within 60 days of the bankruptcy). Travel insurance can also help, but make sure it covers against "carrier default" for your specific travel provider. And be aware that if a U.S. airline goes bust mid-trip, a 2001 federal law requires other carriers to take you to your destination (albeit on a space-available basis) for a fee of no more than $25, provided you rebook within 60 days of the cancellation.

Medical Insurance

Your medical insurance may or may not offer coverage when traveling overseas, and then it is usually for "reasonable" costs, and not emergency evacuation, which can cost up to $10,000. If you are traveling to a remote or high-risk area, evacuation is something to consider. Also, you must pay upfront for medical services and then seek reimbursement from your insurance company later. Medicare and Medicaid do not provide coverage outside the U.S.; citizens may wish to contact the AARP for information about foreign medical care coverage with Medicare supplement plans.

As a safety net, you may want to buy travel 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.

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.