While vacations can be fun and exciting, they’re also not always cheap.

Between lodging, transportation, and food, the costs can quickly add up, making travel insurance seem like an unnecessary luxury. However, in some instances, this expense may just be the best financial decision you can make for your trip.

The basics

Just like with other forms of insurance, travel insurance can protect you financially should the unexpected happen. For instance, it may help with expenses related to lost luggage or emergency care, and you may potentially be reimbursed if your trip is canceled, delayed, or interrupted by circumstances beyond your control.

Though what you’ll pay for travel insurance can vary by provider and policy, Forbes found that it costs on average 5 to 6 percent of the trip’s price tag. (For example, travelers typically pay $61 to insure a $1,000 trip.) The final total may also depend on factors like the amount of coverage you buy, your age, the length of your trip, the number of people you’re covering, and your destination.

Reasons to buy

Travel insurance is typically a good idea for any circumstances where there is decent financial risk, such as if you’ve prepaid for your excursion and face financial penalties for canceling or if you are bringing several valuables. Your destination can also increase your risk: health insurance won’t apply outside the United States in most cases, putting the full financial burden for unexpected medical expenses on you, and areas prone to hurricanes, wildfires, or other natural disasters can cut your trip short. And with flight delays becoming more and more common, you may want some extra peace of mind if your flight plans include multiple connections or destinations.

Additionally, consider your personal situation. Travel insurance could be a helpful safeguard if you know of issues that could threaten your trip, such as if you or a loved one has health issues that may unexpectedly worsen or if work, family, or other responsibilities could force you to postpone or cancel. In instances like these, the benefits of getting coverage may outweigh its cost and help you recoup a percentage of what you spent should your plans fall apart.

When you could skip it

While travel insurance can be incredibly useful, it’s not always worth the expense, especially if the cost of coverage is likely to outweigh anything you might recoup from filing a claim. This may be the case if you aren’t traveling far or if your trip doesn’t entail significant prepaid and nonrefundable expenses. Likewise, if you’re traveling for business on your employer’s dime, travel insurance is money wasted since you’ll have no expenses to insure. (Note that this isn’t the case if you’re self-employed or funding your trip yourself.)

Additionally, you might already have some free travel coverage through your credit card (if you book your trip with it) or existing homeowners or auto insurance policies, including for rental car coverage, flight delays, and lost luggage. Your health insurance policy will also likely cover your health needs during domestic travel. Depending on your trip, this may be all the coverage you need.

Money-saving tips

As with anything else, it pays to comparison shop for travel insurance; don’t just buy the first plan you see, even if it’s one offered by the travel site or agent who booked your trip. Instead, first look into whether your credit card provides you with some basic travel insurance. All you might need to do is use your credit card to pay for your travel expenses and follow any necessary requirements to qualify for that coverage.

If you decide to purchase travel insurance, read reviews of insurers, plans, and rates on websites like TravelInsurance.com, InsureMyTrip.com, and Squaremouth.com, and be sure to look at the fine print on any plans you’re considering so you can find the one most suitable for both your situation and your budget. You might be able to raise your deductible and lower your medical coverage to reduce your premium, but doing so could come at a cost later. Also, if you travel frequently, you may be able to save a few dollars by purchasing a multitrip policy or finding one that will cover all your travel for a year. Whatever you go with, though, always remember to save all your trip receipts should you need to submit a claim.

Comparison shopping travel insurance policies is undoubtedly nowhere near as fun as virtually exploring your next vacation spot, but it might be able to help you avoid the double hardship of having to cancel a much-anticipated trip and losing the money you’ve invested in it.