With tensions in the travel industry and the global
political scene, more travelers are looking into travel insurance.
But the term can mean widely different things, and
can offer either real benefits or an expensive duplication of coverage
you probably already have.
If ever there were a purchase that calls for research
and reading the fine print, travel insurance is it, says Edward
Hasbrouck, author of "The Practical Nomad" series of travel
“You've got a higher chance of getting hit by a bus ... than being killed in a plane crash.”
That's because many of the reasons for which people
would buy travel insurance, such as an airline or cruise line going
out of business or the government shutting down every airport in
the country, may not be covered.
Hasbrouck says he's recommended trip cancellation
and interruption insurance for years, especially if a trip is being
paid for well in advance.
Let's say you've booked a two-week walking tour of
France and then take a spill and find yourself on crutches a week
before you're scheduled to leave. Or your mom has emergency surgery
while you're on an Alaskan cruise and you need to get home.
It happens all the time, Hasbrouck says, and the result
is that vacations are ruined because people either cancel their
trips and lose the money, or go when they'd rather stay home because
they can't get a refund.
"It doesn't deal with the emotional pain, but
it allows you to make your decisions unclouded by money," Hasbrouck
says. "The further in advance you're paying, you're crazy not
to get the insurance."
Pricing for the policies typically is based on the
cost of your trip, how old you are and how long you're going to
be traveling. As a rough guideline, expect to pay between 8 percent
and 10 percent of the cost of your trip.
The best form of trip cancellation and interruption
insurance will not only cover illness and injury, but also supplier
default, which means the company folded. This is especially important
for airlines since Sept. 11, Hasbrouck says, and for cruise lines,
some of which have built too many ships and are on shaky financial
TravelGuard International offers supplier
default coverage if it's purchased within 15 days
of putting down a deposit. Likewise, their medical
expense coverage will cover pre-existing conditions
if it's bought within that window.
Know what you pay for
The key is to ask the right questions, read the fine print, and
make sure that you're actually getting what you think you're buying.
Take flight insurance, for example. This is a life
insurance policy that only pays off if you're killed or maimed in
a plane crash. According to the Independent Insurance Agents of
America, you've got a higher chance of getting hit by a bus when
you're walking out of the airport than being killed in a plane crash.
Many travel policies will also cover you on the ground
while you're using "common conveyances," such as buses,
trains, subways, taxis and hotel courtesy shuttles, but not private
tour buses or rental cars. Chances are good, though, that you've
already got this kind of coverage with your personal or company-paid
life and/or accident insurance policy.