Travel Insurance if Using Air Miles

We faced a similar question-a six-week trip to Europe using tickets we got with miles. But these are on BA so they cost quite a bit regardless. The trip cancellation part of the insurance will only reimburse you for what you actually paid, if you have to cancel your trip. (You have to produce receipts with your claim). So that is the figure you should use, along with any other non-refundable prepaid items. Most travel insurance comes in a package with medical coverage and evacuation expense. You can plug your trip cost and the ages of your family members into the Insure My Trip website and it will come up with a number of policies at varying costs. You can review them and pick the one you like.

Besides taxes, you may want to factor the cost to redeposit the miles in your account should something mess up your trip. I just had to pay AA $225 to redeposit 4 tickets to Europe that I couldn't use.

I look at travel insurance 2 different ways. First, what if I had to cancel at the last minute, say the day before the trip. What money would I be out? (taxes for miles tickets, redeposit miles, hotels, where we'd already be inside the cancellation policy, possibly car rental, or anything else non refundable. Secondly, I look at what happens if 4 days into the trip we had to return home due to an emergency at home. What would it cost to buy return plane tickets, and any money that would not be refundable due to cancellation policies.
I like Squaremouth's website as it allows you to compare multiple polices. I look for ones where the trip interruption cost is 150% of the trip cost. For our next 2 week trip, $2000 cancellation/$3000 interruption cost $115.00. Also look for the bang for your buck for medical emergency and evaculation coverage as they vary widely. We know several people that had severe medical issues which required evaluation out of the country they were in, then special accomodations on a 747 to come home. Fortunately both had travel insurance for what certain was a substantial sum of money.

Thanks, everyone, for the great advice. And Karen, your recommendation to look at it 2 different ways (have to cancel before the trip, have to cancel during the trip) will help tremendously in determining how much to insure. I actually hadn't thought of it that way so I appreciate you sharing that piece of vital information!

In either case the cancellation has to be for a covered reason, so read th epolicy carefully before buying.

And regardless of how much insurance you buy in case you have to cancel mid-trip (or any time, really), you will only be reimbursed for your actual expenses out of pocket - if you cancel for a covered reason (they vary by company and type of insurance you purchase).

One other note, some of the policies cover a cancellation if you are laid off (with a length of service). When booking with miles so far in advance and in the current economy, I make sure to have that as well. Not all policies cover that. And to Nancy's point, the reason for the cancellation has to be covered. (Examples: got injured in a car accident on the way to the airport-probably covered. A family member at home dies/covered- Dog dies/probably not)

My travel rewards Visa covers trip cancellation for any Travel I purchase with my card, insurance on a rental car and it also covers medical insurance for the first 15 days of every trip I take. Is there any chance that you may have some kind of coverage on your credit card?