Study travel insurance before you buy
By Dana Dratch • Bankrate.com

When you're buying a vacation months ahead or spending big bucks on a trip, it might be worth it to pay a little extra to get travel insurance.

Depending on the trip, your circumstances and the policy, expect to pay an additional 4 percent to 8 percent of your trip cost for insurance, says Ed Walker, president of the U.S. Travel Insurance Association.

Because group policies cover a large number of people in exactly the same area who face exactly the same risks (weather, etc.), coverage is sometimes more limited for some circumstances, says Walker. But group rates frequently are lower.

"My advice would be, if you're looking at your options, check the difference between what's offered by the tour operator or cruise company and an independent agent," he says.

Buying travel insurance

• Read the policy and understand exactly what circumstances are covered. Some will automatically cover a host of mishaps, even things like lost baggage. Others cover less. Some policies will cover cancellation for any reason, others just allow medical emergencies. • Look for a policy with an independent underwriter. That way if the cruise line or tour company goes under, there's a separate company still standing to pay for lost expenses. "After 9/11, we saw package providers fall like dominos," says David Lytle, editorial director for Frommers.com. "People were just out the money." • Just as you would with everyday insurance, look for carriers that get a good rating from A.M. Best Co. and a solid credit rating from Standard & Poor's, says Walker. • Shop several different sources for travel insurance. If you're going on a cruise or tour, the company might offer insurance. But look at an independent agent's offerings, too.

Some sites where you can comparison shop: InsureMyTrip.com; SquareMouth.com and QuoteWright.com. Another source to find insurance: USTIA.org (the U.S. Travel Insurance Association), an industry group for travel insurance providers.