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Travel 2006    

Financing your trip

 

Make your travel dreams come true without breaking the bank.

Travel insurance: Are you already covered?

With tensions in the travel industry and the global political scene, more travelers are looking into travel insurance.

But the term "travel insurance" can mean widely different things and can offer either real benefits or an expensive duplication of coverage you probably already have.

If ever there was 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 books.

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.

Travel insurance "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 became 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 ground.

TravelGuard International offers supplier-default coverage if it's purchased within seven 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 accidental death insurance policy.

-- Updated: May 15, 2006
 
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