Trip Cancellation Insurance
This would reimburse you if the cruise line or tour operator goes out of business. It would also provide coverage if you have to cancel the trip due to sickness, a death in the family or another calamity listed in the policy.
In addition, if you or an immediate family member becomes seriously ill or is injured during the trip most policies would reimburse you for the unused portion of the vacation.
The cost is generally five to seven percent of the price of the vacation, so a $5,000 trip would cost roughly $250 to $350 to insure.
Trip cancellation is very different from a Cancellation Waiver that many cruise and tour operators offer. Waivers are relatively inexpensive, costing approximately $40 to $60. They provide coverage if you have to cancel the trip, but they have many restrictions. They must be purchased when you book the trip and will usually not cover you immediately before departure (the time period most people cancel) or after the trip has begun. Most importantly, waivers are not insurance. Cancellation Waivers are not regulated by the state department of insurance, so if your tour or cruise operator gets into financial difficulty, you may not be able to collect.
Baggage Insurance or Personal Effects Coverage
This would provide coverage if your personal belongings are lost, stolen or damaged during the trip.
To insure $1,000 worth of personal belongings for a week, it would cost roughly $50 per year.
Before purchasing this type of coverage, find out how much insurance the airline or trip operator provides for your belongings.
Also, check your homeowners or renters policy. It will usually provide coverage for off-premises theft. Therefore, if your luggage is stolen, your insurer will pay to replace it, less the deductible.
If you are traveling with expensive electronic equipment, jewelry or sporting gear, it might be more cost-effective to purchase a floater or endorsement to your homeowners or renters policy. The cost to insure a $1,000 ring would be between $10 and $40 annually. This would provide full coverage for the item, anywhere in the world, usually for one year.