It is funny, but every traveler has an answer to that question based on his or her own experiences and personality. There are people who would never travel without it and those who think its a complete waste of money.

I fall somewhere in between. As far as I’m concerned, it depends upon where you are going and what you are doing as well as the state of your own health and that of your family back home.

Car Rentals
Lets start with the easy stuff: Car rental CDW (collision, damage waiver) insurance. If you are paying with your credit card and have a gold or platinum card, you may not need it. Call your credit card company and ask what your rental car coverage is. Now, if you are driving in Italy or some Eastern European countries, it may be mandatory by the rental agency. (Makes you think twice about driving in Italy, doesn’t it?) It is actually because there are a lot of car thefts in Italy, so don’t leave your car that is packed with luggage unattended.

Tour Insurance
Most Tour operators offer reasonably priced insurance for their tour packages. Many times it covers cancellation for any reason before you go, and health reasons , weather or terrorism problems while on the trip. For some tour operators, it is a mandatory part of the package. This insurance is generally so inexpensive, that I recommend it.

Regular Travel Insurance
This costs anywhere from 4% to 8% of the total trip cost. It covers lost luggage, health problems, and reimburses air and hotel if you must cut your trip short. If you have health issues and may have to cancel before you leave or come home early; get the insurance. If you have a family member at home, who is ill and may have a crisis while you are abroad, get the insurance. Read the policy; they are all different and some companies are more reputable than others.

If you are traveling to a distant country and plan to be trekking in the wilderness, you might consider getting Travel Insurance. It costs a small fortune to be life-flighted to a big city or home from the middle of nowhere.

We usually travel to Europe on a large, reputable airline , which will usually exchange your ticket for a small ($50 to $100) fee per person; stay in hotels where you can cancel within 48 hrs of check-in; and rent a car with my platinum credit card. So generally we don’t buy insurance.

I just read an article in the Chicago Tribune, on this very subject. They too offer pros and cons and site more examples of the benefits and drawbacks of Travel Insurance . If you are grappling with the question of whether or not to buy Travel Insurance, read their in-depth article… it could save you some money and/or some worries.