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Travel insurance reduces risk
SINCE MANY PEOPLE SHELL out thousands of dollars for major trips, it's no surprise the percentage buying travel insurance has increased substantially since the September 2001 terrorist attacks.
The demand for insurance goes beyond fear that terrorist activities could cancel or interrupt trips. The downturn in tourism contributed to the instability of some tour and cruise operators. Seniors and those with pre-existing medical problems may have health concerns. Parents worry that a child's illness will cancel their dream vacation or cut it short.
Although travel insurance can cost as much as six percent of your trip, it can be a wise investment for big-ticket cruises or multi-leg tours that demand total payment months in advance and impose hefty cancellation penalties. |
Frequent cruise and tour travelers Dianne and Edgar Gutweniger of Sun City West, Arizona, consider it a necessity whether their destination is Alaska, Hawaii, or Russia. "We take our chances on two-night trips that cost around $500, but on the longer trips that run $3,000 to $5,000 each, we always purchase insurance," Dianne said.
Benefits Galore
As with other types of insurance, travel insurance benefits vary widely. Dan Bachmann, president of Ford's World Travel (with three Arizona locations), said 80 percent of his clients take some form of insurance, depending on circumstances.
Benefits can include trip cancellation insurance (TCI), travel delays beyond a certain number of hours, supplier default, terrorism, lost baggage, emergency medical care, and medical evacuation.
Bachmann said some policies will pay for trip cancellation if you lose your job or your child becomes seriously ill. Others provide benefits if you're called to military or jury duty, or if the company you work for is involved in a merger or acquisition and your presence is required.
Read the Fine Print
As with other contracts, take time to read the small print. Terrorism coverage, for example, may have unique exclusions that make it difficult to collect.
Travel delay coverage differs widely from policy to policy. "It could be six to 12 hours before payment kicks in," Bachmann advised. "Watch out for exclusions--some travel insurance policies provide only secondary coverage." Thus, if your lost or stolen jewelry or camcorder is covered by your homeowner's policy, you'll collect on that first. Likewise, you would collect first from your primary medical insurance plan if you are injured or become ill and need medical evacuation.
Trip cancellation coverage also may have some exclusions. The insurance may or may not ante up if you cancel because your traveling companion who is not a family member becomes ill at the last minute.
Because not all tour operators are financially stable, financial default protection is important. Some insurance companies exclude certain unreliable tour operators.
Medical Coverage Tricky
Finding emergency medical care when traveling can be stressful enough without worrying about paying the bills. Check to ensure your medical insurance is valid at your destination and enroute, especially if your plan is tied to a local medical group.
Since some premiums are age-based, a 65-year-old likely will pay more than someone 55. Many policies will not cover pre-existing medical conditions. However, Bachmann said if travelers buy insurance within a week after booking their trip, pre-existing conditions can be waived.
Medical evacuation insurance is critical if you travel to a remote location and need air evacuation to a distant hospital.
Shop Around
You can purchase travel insurance from travel agents, cruise and tour operations, or via the Internet. The Gutwenigers purchase insurance through their travel agent, who helps them find the right coverage for their situation. Some agents provide a sample policy to review, whereas the Internet does not always answer all questions.
Compare and contrast policies. For fast cost comparisons from a number of insurers based on information you plug in, visit www.InsureMyTrip.com. |
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