Travel insurance can help, but has its limits

My basic travel insurance which costs around $50 each trip paid 100% of my emergency trip to the hospital.

Last May, when American Airlines had a fare sale, Chandler O'Brien bought a roundtrip ticket to Tokyo for $650. Her 10-day trip to Japan is scheduled to begin April 1. O'Brien, who does sales and design for an event rental company in Austin, Texas, said she doesn't usually buy travel insurance. But since the ticket was purchased so far ahead of her travel, she added $60 for travel insurance through Allianz Global Assistance, which American offered on its web site.

O'Brien recently decided to cancel the trip because of concerns about the outbreak. American Airlines waived its $250 cancellation fee and offered her a credit on future travel. The catch? Her future travel must be completed by May since that will mark a year since she bought the ticket.

She bought the ticket in May last year with a departure date for 11 months later. Couldn't she have departed sooner than that? Even if she ends up paying the cancellation fee, she's only losing $250. Next time maybe she'll depart within a few months of buying her ticket.