Avoid Travel Calamities; Purchase the Travel Insurance

The stranding of thousands of people faced with ruined vacation plans in the wake of the Thomas Cook collapse brings a common question to mind.

Should we get the travel insurance?

For the majority of the U.K. citizens traveling when Thomas Cook failed, they are being repatriated through a government insurance program. This means those travelers who book tours will receive refunds for canceled trips and repatriation free of charge.

For those who only bought flights, they will likely need to rely on any insurance they purchased, or contact their credit card company for help.

The collapse of Thomas Cook left roughly 600,000 travelers stranded in 18 different countries. This is a dramatic impact on the travel industry.

So, the idea of travel insurance is a good one.

Purchase insurance directly from an insurance provider rather than directly from the travel agent. If the agent fails, you will have a better shot at making sure the insurance will cover you. Often the insurance offered by the tour operator is "self-insured." This means, like in the case of Thomas Cook, the insurance is void because the tour operator owned the insurance company.

Make sure you are covered to the full extent. Look for a Cancel For Any Reason (CFAR) policy because it will allow you to recoup as much as 75% of the trip if something drastic happens. You have to buy this at the time you purchase your travel insurance and you must do it within 7-21 days of booking and paying for your trip.

Use the right credit card. Often financial institutions offer travel protection if you use their card to pay for the travel. Look at the fine print and use the card that offers you the best protection.

Escaping to a new destination has some element of risk and anticipation. You can reduce some of that stress by protecting yourself in advance.