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The takeaway: Study the fine print.

Martha C. White / Money.com
August 10, 2016

This story originally appeared on money.com.

With fears about Zika outbreaks and terrorist incidents on every traveler’s mind, you may be wondering if you should consider buying travel insurance for your next trip.

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Before you decide, here’s what you need to know about the options, what you can expect to pay, and what will—and won’t—be covered.

What does travel insurance cover?

Ideally, travel insurance will reimburse most (no, not all—we’ll address that below) of your expenses if you or a traveling companion has an illness or injury that prevents you from taking a scheduled trip, if circumstances beyond your control make it impossible for you to take your trip, or if you get sick while traveling.

The key here is understanding the fine print, says Damian Tysdal, founder of TravelInsuranceReview.net. “Travel insurance is a ‘named peril’ insurance policy, in that it specifically states what is covered,” he explains. So if an event or calamity isn’t spelled out in the policy, don’t expect to be covered if it occurs.

For instance, just because your insurance reimburses you if you get sick before your trip and can’t go, don’t assume you’re also covered if you fall ill while you’re traveling, especially if you’re overseas. That’s a different type of coverage, and while insurers may bundle them into packages to make it easier for travelers, it’s not a given that any policy you buy will include both.

What doesn’t it cover?

See above—anything not spelled out in the policy falls outside the scope of coverage. Assuming otherwise is a prescription for frustration. Speaking of prescriptions, pre-existing medical conditions are generally excluded, although policies have different stipulations about what qualifies as “pre-existing.” A medical issue you had several years ago that hasn’t resurfaced, for example, might not be considered pre-existing. But, as with other specifics, your particular policy will spell out the length of time your insurance company can “look back” into your medical history.

How much does travel insurance cost? 

The exact amount will vary based on the insurer, what kind of coverage you choose, the number and age of the people in your party, where you’re going, and how long you’ll be away, says Laura Adams, senior insurance analyst for insuranceQuotes.com. That said, “On average, you can expect to pay from 5% to 15% of the cost of your trip,” she says. A typical deductible is $200, but you can opt for a higher amount in order to reduce the cost of the policy.

Related: We Just Tried to Book a Last-Minute Trip to the Olympics. Here’s What Happened

What’s the biggest mistake most people make when choosing a policy? 

“Most travelers assume that they have a ‘cancel for any reason’ plan,” says Beth Godlin, president of Aon Affinity Travel Practice. Most people actually don’t, since that comes with a considerably higher premium (anywhere from 20% to 50% more is typical). If your plan does have a cancel-for-any-reason clause, that still doesn’t get you off the hook for reading the fine print, Godlin cautions. “Be sure you understand the terms,” she says. “Note what percentage of the trip might be either refunded in cash or returned in a credit, as those terms can vary dramatically.”

How sick do I have to be to file a claim?

Sick enough to see a doctor. “The illness must be verified by a physician,” says Tysdal, and the doctor must recommend that you do not travel. Keep that in mind if you come down with something like a stomach flu the day you’re supposed to fly. While in the short term that can be pretty debilitating, it might not, under ordinary circumstances, be something for which you’d see a doctor.

What if the person I’m traveling with gets sick? Am I still covered?

“One of the most common reasons for a trip cancelation is sickness or death in the family,” Tysdal says. “[Insurance] usually covers you, a traveling companion, or an immediate family member.” For instance, if you have dependent like a child or an elderly parent who suddenly becomes ill prior to your trip, you should be covered.

What about bad weather? 

Many plans cover losses if weather causes you miss a connection to another flight or a cruise, Tysdal says. “Hurricanes and bad weather can be covered, but you need to actually suffer a loss,” he says. “For example, the weather event must cancel or delay a flight, or cause damage to your destination.” In other words, you can’t cancel your trip to the tropics just because of the threat of bad weather.

What about Zika? Or terrorism? Will travel insurance cover that?

Probably not. “Travel insurance allows you to handle unforeseen problems,” Adams says. Unfortunately, insurers’ idea of what counts as “unforeseen” might not be the same as yours. “Most standard policies don’t cover trip cancelation in the event of civil disturbances, acts of terrorism, or disease threats like Zika,” she says. If you’re traveling to a destination where an outbreak of a virus or violence is a real possibility, consider if it’s worth paying the extra for a policy that lets you cancel for any reason—or if it’s worth going in the first place

What if I want to back out of the trip for any reason—or none at all?

You can get a cancel-for-any-reason policy, but be prepared to pay. Expect the premium to be as much as 50% higher, and there are a few other conditions as well, Tysdal says. “You need to insure the full trip cost, purchase it soon after initial deposit date— within 14 days—and cancel more than 48 hours prior to departure,” he says. Compare travel insurance policies carefully before making a commitment; many reimburse only 75% of your costs, there are detailed sliding scales insurers use to determine how much you can recoup, and some have dollar caps.

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Is travel insurance worth it? 

That depends on how flexible your arrangements are to begin with. “Hotel bookings that allow cancelations right up until day of check-in may not require travel cancelation coverage,” Godlin says. “However, if you pre-pay, you may want to consider having that protected.”

The length of your trip as well as how far in advance you’re planning should also be factors, she says. “Consider the time between booking and paying for the trip and actually taking it. For example, if you won’t embark on your cruise of a lifetime until March 2017, a lot could happen before then.” Also, be sure to check out the benefits your credit cards offer before you shell out for travel insurance; some cover things like trip cancelation and lost luggage.

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