Travel Insurance: Don't Buy It Blindly

(CBS)  If you're booking a trip, you may be asked a simple, yet complicated question: Do you want to buy travel insurance?

As The Early Show consumer correspondent Susan Koeppen pointed out on Tuesday, it's a big business getting even bigger.

She answered some basic questions: When does it pay for you to buy it? What does it cover? How much do you need?

The U.S. Travel Insurance Association (UStiA), reports a big jump in the number and percentage of people buying insurance when they go on vacation, to 30 percent today, compared to less than 10 percent a few years ago.

A survey done for the The UStiA found Americans spent more than $1 billion on travel insurance last year.

The increase has been fueled in large part by natural disasters such as hurricanes and earthquakes, and by tragedies like 9/11.

The survey also found that more Americans are buying travel insurance online, with such sales nearly doubling from 2002 to 2004.

But even some travel insurance companies admit you don't always need it, and you should know what you're buying, because of a lot of people are buying it blindly right now.

According to Koeppen:

IT MAKES SENSE TO BUY TRAVEL INSURANCE:

If you have a trip that is non-refundable and you're worried that it may be cancelled due to family illness or the weather.

if you're worried about access to medical care and traveling outside the U.S. Your health insurance may not cover medical emergencies if you're out of the country.

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