Whenever you prepay, you're at risk for the full amount, less what the supplier will refund if you cancel. Trip insurance pays the difference between what you pay and what you can get back if you cancel. Trip insurance covers a wide range of reasons for cancellation. You're covered if you, a traveling companion, a close family member who remains at home, or a business partner gets sick or suffers an accident or if your house burns down. You're covered if you or a traveling companion are called to jury duty or if severe problems break out in your destination area.
Policies vary as to specifics, but most are similar.
You probably do need trip insurance when you buy a cruise or tour, or rent a vacation house or apartment. You usually have to prepay the entire amount, often months in advance, and nobody can predict what can happen between the time you pay and the time you leave. You probably don't need trip insurance if you buy separate airline tickets and reserve but don't prepay hotel accommodations or a rental car. Diane Panasci Send to Diane Panasci with questions or comments about this web site.