The volcano in Iceland has been a traveler's nightmare.

Hundreds of thousands of people have been stranded in Europe, and plenty of folks in this country have had to cancel overseas vacations.

No doubt, a lot of people lost money because of it. It's called travel insurance and after the events in Europe, you may consider ponying up a little dough before your next trip.

The most common, and the one we're talking about, is trip cancellation - interruption coverage.

Most of these policies cover cancellations due to weather, sudden illness or death, jury duty, emergency military duty, and bankruptcy of airline or cruise line prior to departure.

Typically, travel insurance costs 4-to-8 percent of the total cost of your trip.

So, if your trip costs 5,000 and you paid 5 percent, your cost for travel insurance would be $250.

"In a recent Angie's List poll we found that 35 percent of the respondents had bought travel insurance and the majority thought it was a good investment. But it's really important when you are thinking about travel insurance to determine how much is the trip? How much will I pay for the travel insurance? How much of the trip is really not flexible? For example, you might be able to pay $100 and change a plane ticket or you might be able to cancel a hotel reservation. So you really need to think about how much money you'll be out if the trip gets canceled." Angie Hicks from Angie’s List said.

A lot of companies and travel agencies offer travel insurance, so, it's very important to shop around. Do your research just as you would when buying health or homeowner's insurance.

Make sure to go through a well established company - one that is licensed and bonded.

“You want to find a reputable company. Often times you'll hear stories that if they bought it through a company that's not reputable and they go under, then they are out on the travel insurance,” Hicks said.

Make sure you read the fine print.

Before you buy, make sure the risks you want to cover, are covered, and spelled out clearly in the contract.

Also, save all documents related to your travel in case you have to file a claim.

According to Angie's List, if you travel out of the US your medical insurance typically does not cover you. You should check with your own insurance first.

Most travel insurance plans offer medical coverage for an added premium.