Editor’s note: This is part three in a series of posts about travel insurance sponsored by Access America. Here’s part one and part two.

We’ve already reviewed who needs travel insurance and where to find it, but how do you know if you’re getting a good deal?

There’s no authoritative buyer’s guide that can tell you if you’re looking at a bargain policy or a rip-off. That’s because no two travel insurance policies are exactly the same. They vary based on your age, state of residence and coverage.

Travel insurance typically costs between 4 and 8 percent of your trip’s prepaid non-refundable cost. However, a “cancel for any reason” policy can run you 10 percent of the nonrefundable cost or slightly higher. Your policy may be more expensive if you’re older or engaging in a risky activity that makes a claim more likely, but generally speaking, you should be in that range.

A word of warning: If the policy is less than 4 percent of the cost of your vacation it should raise the same red flags as if it’s more than 10 percent. Too-good-to-be-true “trip protection” policies have cost travelers millions – and perhaps tens of millions – in unpaid claims. If it’s really travel insurance it will be underwritten by a reputable insurer.

(By way of full disclosure, one travel agency that sold these unlicensed and unauthorized policies sued me unsuccessfully in 2010 – long after the travel “protection” company whose policies it sold had gone belly-up.)

At the same time, policies that cost significantly more than 10 percent are a reason for concern. Read the terms very carefully and make sure there’s a good reason why you’re paying that much for your insurance.

The other big question: When to buy insurance? There’s a simple answer – and a complicated one.

You can get travel insurance up until the day before you travel from some travel insurance companies. But the sooner you buy your policy, the better.

Why? Well, let’s say your airline declares bankruptcy between the time you book your vacation and your departure date. You’ll still be able to buy a policy the day before your departure, but if your airline has already filed for Chapter 11 protection, then the policy won’t cover the airline if it stops flying.

Another reason: Most travel insurance policies will offer coverage for pre-existing medical conditions that are under control if you buy the insurance within a couple of weeks of your first trip payment (other conditions also might apply). Since up to 20 percent of claims could be traced to pre-existing medical conditions, this could be an important point.

So buy the policy sooner rather than later, and keep it between the 4 and 8 percent range, and you’re on your way.

Next, I’ll show you how to make the best use of your policy.

(Photo: Ralph Man/Flickr Creative Commons)