Travel and insurance: do they go together for someone on a budget? There is not an easy, one-size-fits-all answer to this question.

In a variety of situations, travel insurance can be useful. If you experience trip cancellation or trip interruption, insurance can be a tremendous budget advantage. Travel medical insurance protects you in places where your regular policy might not apply.

Here are some issues to consider as you decide whether or not to invest in a policy.

Do you have the financial resources to pay for most of this trip all over again?

That's a toughie for most of us. Our travel resources are limited. Children need braces and the car needs new tires. Just about everyone who isn't wealthy can ill afford to pay for a trip and then pay for many non-refundable items a second time.

If your answer is "no," you should keep thinking about some insurance to protect yourself.

Consider carefully what items would be reimbursed.

Generally, trip interruption or trip cancellation insurance covers items that are not refundable. Among these expenses, how many are covered?

Not all of them are built into every policy.

Frequently, the insurance only protects you in the event of a sudden illness, serious injury, or death in the family. You might not define "illness" and "serious injury" in the same way as the insurer, so read the documents carefully.

Expect to pay more for policies that go beyond the basics. Some will cover areas under threat of terrorism or civil unrest.

Others protect against so-called "acts of God" such as earthquakes or hurricanes.

Is the coverage good for every segment of the itinerary?

A journey that crosses international borders might be a problem. The policy might note that coverage is only good within the company's home country. Other policies sometimes exclude certain areas for reasons that might not make much sense to you.

Be wary of "bankruptcy" protection.

A fair number of companies that go belly-up never officially declare bankruptcy. If your policy spells out that word by name, you may not be covered if an official declaration is not made. Another consideration: it often takes months (or even years) between cessation of operations and the official declaration. You will get nothing until it's filed.

Look for language that covers you if the company cancels the trip for financial reasons.

Buy coverage from a disinterested third party.

Cruise lines frequently offer trip interruption or trip cancellation insurance. What if they go broke? Do you think they will have funds to reimburse you? The same can be said of travel agents or any other entity in the travel industry.

Look for policies from established companies outside the travel industry.

Call your credit card company.

Some credit cards providers insure travelers against losses. It's worth checking. Beware: it might not be adequate.

Do some shopping.

Prices vary more widely than the coverages offered. It pays to do some comparison homework on premiums.

Only cover potential losses.

Inexperienced travelers make the mistake of buying insurance coverage equal to the entire cost of the trip. You only need enough to pay for items that are not reimbursed.

For example, even a non-refundable airline ticket can be exchanged for new dates. A fee is involved to make the change. Make sure you're covered for the fee, not the entire cost of the ticket.

Always err on the low side. Most of us can afford to risk losing some of the money. Few of us want to be over insured.

Will the policy pay for transportation?

If you'll be visiting an area with limited medical facilities, consider a plan that would pay to have you airlifted to modern hospitals and competent physicians. This is a vital consideration if you'll be hiking, climbing or otherwise engaging in potentially dangerous activities.

Know the limits on help for pre-existing conditions

If you suffer from asthma, and experience a severe attack on the road, will the insurance company refuse coverage because the condition existed prior to departure? It's a legitimate question to ask.

Does existing health insurance cover your destination?

If you'll be traveling overseas, it's likely your home health insurance will not fully cover you on foreign soil. Some items might be covered, so check carefully.

Trip interruption and trip cancellation insurance can add a hefty sum to your budget for travel. Only purchase it for longer, more expensive trips. Read the fine print and shop around for the best buys.