Most of us are accustomed to buying insurance to protect our biggest assets: our homes, cars, businesses and household property. But too many people neglect to protect themselves against losing the large sums of money they invest in travel.
Think about how much you may have tied up in nonrefundable payments for airline tickets, cruises, hotel bookings and package tours. Then think about what might happen if, for unforeseen and unavoidable reasons, you can’t make the trip. Maybe you get sick, or have to attend to a family crisis. Maybe a strike or a natural disaster or bad weather closes an airport or a hotel that you were depending on.
Whatever the reason, you can’t make, or complete, the trip you’d planned. Even worse, you might end up stuck somewhere far from home, with no easy way to get back.
That is what travel insurance is meant to protect you against. Its cost is low compared to the potential for financial loss if a trip is canceled, interrupted or delayed.
A typical travel insurance policy will cover both trip cancellation and trip interruption, but not necessarily delays. Circumstances that are covered include death, illness and other specific unforeseen events.
Some policies also may cover travel delays that are caused by mandatory evacuations, such as at a beach resort under a hurricane warning.
In the case of severe weather, a travel policy provides benefits if an airline or other common carrier experiences a “complete cessation” of activity, or if the accommodations at your destination are uninhabitable. That means, for example, if an airport or a hotel is closed because of flooding or wind damage.
Some policies cover trip cancellations in the event of terrorism at your destination, but may limit that coverage to a set number of days after a specific incident.
Travel insurance also can protect you if an airline, hotel or tour operator closes due to a financial default. This is an area where policies can differ, especially if you buy your insurance directly from the tour operator. It’s important to know the details of what’s covered, and what isn’t.
The most economical policies define the permissible reasons for cancelling a trip. In case of illness, some policies may set limits if you have a pre-existing medical condition. Other covered reasons for cancelling can include a layoff or other job loss, or specific unforeseen work-related conditions.
People who travel frequently, or are planning a very expensive trip, may find it’s worthwhile to pay more for a policy that covers any trip cancellation or interruption, for any reason.
One of the most important things good travel insurance does is to provide medical care, and if necessary transportation home, if you or a companion becomes sick while abroad. That’s important, because most health insurance policies don’t cover care that’s provided overseas. Like most medical coverage, this form of travel insurance may be subject to co-pays, deductibles and limits on pre-existing conditions.
What’s known as medical evacuation coverage pays to transport you or a traveling companion to a place where needed medical care can be provided. Medical repatriation coverage helps you get home when you’ve had a medical emergency.
A related coverage, emergency evacuation, helps you get to a place of safety in the event of civil or political unrest.
Loss or delay coverage can pay for extra meals or hotel stays if your trip is unexpectedly delayed, such as by a canceled flight. The coverage can compensate you if you miss a connection due to accident or bad weather, or have to catch up to a cruise ship that sailed without you. It can also reimburse you for essential items if your luggage is lost or significantly delayed. If you will be carrying expensive – $1,000 or more –personal items in your luggage, it’s a good idea to have them explicitly listed, and covered, under your homeowner’s policy.
Other types of coverage that may be available in a travel policy include accidental death and dismemberment, usually limited to accidents while actually in transit; and identity theft protection in case passport or credit cards are stolen. Many insurers offer 24-hour telephone hotlines for policy-holders to receive help if something goes wrong during their travels.
Generally, travel insurance policies cost from 4 percent to 8 percent of the total trip cost, depending on what’s covered. Older travelers, and those with pre-existing medical conditions, can expect to pay more. A travel medical plan, which doesn’t include trip cancellation coverage, may cost significantly less than a more comprehensive package plan.
If you’re in doubt about which specific coverage makes best sense for you and for the particular trip you’re planning, it’s always wise to consult an experienced insurance agent for advice.
Jim Moore is the president of James E. Moore Insurance Agency. Established in 1954, it has become one of the most trusted independent insurance agencies in North Carolina. The James E. Moore Insurance Agency is a family-owned business and offers homeowners, automobile, life and health, employee benefits, and commercial insurance products. For more information, call 910-256-5333 or visit the agency’s website at www.jamesemoore.com.