Travel Insurance: When Do You Need It?

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What are the best sources, and what makes insurers balk?

You need travel insurance when you go on a trip. Buying it before you leave is a necessary part of smart travel planning. But I'm not talking about the policies that insure you against the wings falling off in mid-air. Flight insurance is silly protection against an infinitesimally small risk. I'm talking about the many lesser travel mishaps that all the world except us regards as reasonably likely.

Next time you're in a foreign country, go into a travel agency and look at the inside back cover of its tour brochures. There you'll find an insurance policy.

Nearly all the English and French, the Germans and Japanese, the Latin Americans and Koreans, buy travel insurance when they go on a trip. Nearly all Americans don't. We are the eternal optimists, products of a frontier psychology, confident and smug. We're not gloomy worry-warts like those people from the Old World.

And yet travel is an uncertain activity that can often go wrong. And we are fallible, fragile human beings whose life can never be entirely uneventful, and who sometimes fall sick while traveling, or need to cancel a trip for a dozen reasons, or interrupt it in mid-course. Just as bad, travel companies sometimes go out of business, stranding travelers abroad, or canceling travel with no word of a refund. We need travel insurance, and it's easy and inexpensive to obtain, the most basic type of coverage costing about $5.50 per every thousand covered. However, prices will vary by the type of coverage you choose and your age (an 81-year-old will usually pay higher premiums than a 35-year-old).

You can buy travel insurance from a travel agent or tour operator, but you could have a problem should the company you purchase from go belly up. As well, some travel agencies press insurance that protects them and not you, should a mishap occur.

We'd recommend making your own arrangements. You can purchase insurance directly from a half-dozen major companies that now issue comprehensive policies against every conceivable sort of travel mishap (illness, hospitalization, dire medical emergencies requiring evacuation home, trip cancellation for business reasons, trip cancellation or interruption because of the death or illness or a relative, tour operator insolvency, many more).

The best-known name is:

Travel Guard International, 1145 Clark Street, Stevens Point, Wisconsin 54481-9970, phone 800/826-4919, Web: travelguard.com. Its comprehensive policy insures against a wide range of travel mishaps and losses, including trip cancellation and interruption, financial default of the airline, cruiseline or tour operator, various medical problems, loss of baggage or delay in delivering baggage; and the premiums average $100 per person for protection up to a thousand dollars per person, $15 per person for protection up to $1,500, $200 for protection up to $2,000, $300 for protection up to $2,500, and so on (as we said before, these rates can vary). These are fairly standard premium costs charged by most travel insurance companies. See Travelguard's brochure (obtainable by calling the above number) for the precise details.

Among the other reputable names for standard travel insurance (trip cancellation, luggage, and the like) are GlobalCare (800/821-2488), CSA Travel Protection (800/873-9855 or csatravelprotection.com/), Access America (800/334-7525 or accessamerica.com/), Travelex (888/867-9531 or travelex-insurance.com/) and Travel Insured International (800/243-3174 or travelinsured.com/).

Among the prominent issuers of medical assistance policies (hospital insurance, physician care) for Americans traveling abroad are Wallach & Company (800/237-6615 or wallach.com/). Before you work with any of these companies, make sure that they cover "insolvency"; a number of major companies stopped covering the bankruptcy of a travel provider after September 11, 2001. Some companies specialize in medical evacuation insurance, agreeing to fly you to the nearest modern hospital from the jungle or island or mountains where you may have been far from civilization when you were suddenly struck down by illness. Among the big names in this field are are Travelers Emergency Network (TEN) (800/ASK-4-TEN or tenweb.com/), International SOS Assistance (800/523-8930 or internationalsos.com/) and Air Ambulance Card (877/424-7633 or airmedassistance.com/).

What makes insurers balk

If you're headed to the Caribbean during hurrican season when prices are cheap--travel insurance seems like a sensible purchase. By the time some policyholders figure out what's covered, however, they're battling it out with a claims adjuster. "The onus is on the insured to know what's in their policy," says Peter Evans, executive vice president of InsureMyTrip.com. "If it's not specifically stated, there's no coverage."

Log on to insuremytrip.com, quotetravelinsurance.com, and tripinsurancestore.com to compare plans; what they cost, cover, and pay out varies widely. But after reviewing a policy, there's one important question left: When are you not covered?

You bought insurance after a weather warning was issued

"Preexisting conditions" aren't covered by health insurance, and events deemed "foreseeable" aren't covered by travel insurance. To safeguard against the weather, your insurance must be purchased before the National Weather Service (nws.noaa.gov) issues a storm warning.

The weather's not bad enough

Insurers will only pay when travel gets delayed or canceled. If the airlines and the cruise ships are operating, you can either go on the vacation or lose your money.

Your cruise itinerary changes

When a port is expecting a rough storm, cruise lines often substitute a different port where the weather is more promising. If the cruise takes place--even if the new ports are second-rate--the insurance company doesn't owe you a dime. Plead with the cruise line instead; it might give out vouchers for future cruises.

You're not delayed long enough

Benefits don't kick in the moment your flight is delayed. Instead, there's a waiting period--typically 5 to 12 hours, depending on the policy--before you can book a hotel for the night and expect to get reimbursed.

The delays have made you want to cancel

The initial flight on your seven-day trip to St. Thomas is postponed overnight, and you have to stay at an airport hotel (covered under your policy, thank goodness). The next day, flights are still delayed. You want to scrap the trip, but you can't--not if you hope to get reimbursed. With some policies, more than half of your vacation has to be delayed before you can cancel and be covered.

The hotel is ruined, but the airlines are flying

A hurricane hits Jamaica two weeks before your trip, ripping the roof off your hotel. If flights are running on your departure date, insurance might not do you any good. Even if your hotel is completely destroyed, most policies don't have to pay, as long as you can still get there. One exception is from Travel Guard, which words its policy more broadly than others and ponies up if the destination is ruined.

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