Comparing Travel Insurance to Find the Right Coverage for Your Trip

When booking a vacation, most people spend far more time thinking about hotel amenities and resort reviews than travel insurance. They think that because they don't plan on getting sick, they don't need coverage that is just going to make their trip even more expensive.

But travel insurance is a lot more than a hedge against illness or injury. It also covers you if an airline cancels your flight or if you have your wallet and passport stolen while traveling. In other words, travel insurance provides peace of mind.

There are a lot of different travel insurance policies available. Understanding your exact needs during your trip will help you choose a policy that is best for you. Here are a few things to keep in mind.

If you're leaning toward adventure travel, such as whitewater rafting, ziplining, or mountain climbing, coverage for high-risk activities is a likely must-have. But with the possibility of flooding, hurricanes, or even a terrorist attack in the most bucolic settings, medical coverage is not a bad idea. (Your U.S. health coverage may not pay for your evacuation or coverage in a foreign hospital.)

Once you've taken a look at your itinerary, you'll be able to assess travel insurance plans that suit you. Read the policies closely so you understand what's covered and what isn't. Some policies might cover lost luggage, while others focus on protecting you in the case of illness or a medical emergency.

Remember, you'll be out more than just the price of luggage if something goes missing. Once you start adding up the value of all your clothes, shoes, camera, electronic equipment and anything else you might be traveling with, the price tag could be well into the thousands of dollars. The United States government requires airlines to pay up to $3,500 for lost luggage, but sometimes that won't even be close to the real value.

Most travel insurance policies will have deductibles (sometimes called "excesses") that you will have to pay if something happens on your trip. If you have a lost luggage policy with a $100 deductible, you would be responsible for the first $100 and your policy would then reimburse you for everything else if your luggage goes missing. If you want a lower deductible, then you can always adjust your policy and pay a higher premium.

A comprehensive plan will protect you against most things that could go wrong before and during your trip, including illness, lost or delayed luggage, trip interruptions, and trip cancellations. Because it covers such a wide array of mishaps, it's a popular option. (But be sure to read up on the exclusions - that is, what the policy doesn't cover.)

Most people purchase travel insurance for each individual trip they take. However, if you are planning multiple trips during the year and know you need comprehensive insurance, an annual plan might be best for you. It usually becomes the cheaper option with three or more trips per year.

If you are most worried about illness or injury, a travel medical plan might be best for you. While a comprehensive plan will cover most medical expenses, a travel medical plan will offer more specific coverages. Not only will you be able to receive emergency medical attention, but if the hospital you are taken to can't fully handle your needs, then you can be moved to a facility that is better equipped. Travel medical plans are only available when you are traveling outside of your home country.

If you're traveling to a remote spot without full medical services, then an evacuation policy might be a good option for you. You can purchase an evacuation plan on its own or as an add-on to a comprehensive or travel medical plan if your policy doesn't already include it.

Travel accident insurance will act as a life insurance policy while you are traveling: It will cover you in case of "accidental death or dismemberment." Depending on who you purchase your travel accident plan from, it might include some coverage for emergency medical expenses as well as non-emergency evacuations.

If you purchase travel insurance and find that certain contingencies aren't covered - for example, if there is the chance that you might be kidnapped and therefore need ransom and extortion coverage - then you will probably need a specialty plan.

Your trip is all planned out, and you've decided to put your mind at ease by purchasing some travel insurance. So where do you go to find the right insurance for your needs?