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Tips for Purchasing Travel Insurance

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I.I.I. Provides Tips for Purchasing Travel Insurance

Anyone considering an expensive, pre-paid vacation should consider travel insurance to protect their financial investment, according to the Insurance Information Institute (I.I.I.).

A comprehensive policy will reimburse you for nonrefundable airline tickets and other expenses if you have to cancel your trip for an unexpected family illness, injury, severe weather or a host of other disasters listed in the policy

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The U.S. Travel Insurance Association (USTIA) says that insurance help with some of the more common travel mishaps such as lost passports and cash wire assistance, some travel insurance providers even help their clients rebook canceled flights, make new travel arrangements and coordinate ground transportation and lodging.

Specific travel related coverage can be purchased individually or bundled together as a package. Following is a list of the five major types of travel insurance:

  1. Trip Cancellation insurance provides coverage for pre-paid nonrefundable expenses—up to the limit of coverage purchased—in the event you have to cancel a trip due to sickness, a death in the family or other types of disasters listed in the policy, a hurricane, or even an accident on the way to the airport. It will also reimburse you if the cruise line or tour operator goes out of business.

    Trip cancellation insurance is different from the cancellation waivers that many cruise and tour operators offer. Waivers are relatively inexpensive, costing approximately $40 to $60. They provide some coverage if you have to cancel the trip, but have many restrictions.

    For example, waivers must be purchased when you book the trip and they will usually not cover you immediately before departure (the time period during which the majority of travelers need to cancel) or after the trip has begun. Most importantly, waivers are not insurance—they are not regulated by the state department of insurance, so if your tour or cruise operator gets into financial difficulty you may not be able to collect.

  2. Trip Interruption reimburses you if you or an immediate family member becomes ill or dies, or if due to any misfortune listed in the policy you are forced to return home earlier than planned. This could include bad weather, airline strikes and terrorist attacks. Most policies reimburse you for the unused portion of the vacation.

  3. Baggage Loss reimburses you for lost, stolen or damaged personal items. If you buy baggage insurance, be sure to review the policy for the list of property that would not be covered. Some of your property could exceed the limits allowed. And, keep in mind that your homeowners insurance may cover many of those items already.

  4. Emergency Medical Assistance and Evacuation provides insurance and medical assistance for travelers. For example, it would cover you if you had to be airlifted to a hospital or if you had to stay in a foreign hospital for a prolonged period of time. It also provides coverage if you become seriously ill or injured and need to be flown to a better medical facility than is available where you are vacationing.

    Before purchasing this type of coverage, check with your own health insurance carrier to find out what type of coverage you already have when traveling abroad and what the coverage limits are. And be sure to ask whether your own health policy pays to fly you home or to a country with first-rate medical care.

  5. Accidental Death provides a variety of coverages if you, or a family member, die on the trip. If you have a good life insurance plan and have made other financial provisions for your loved ones, this may be duplicate insurance so check that you actually need it before purchasing accidental death coverage.

The I.I.I. also suggests that you consider the following questions before purchasing travel insurance:

  • Is the travel insurance company licensed by the state insurance department where I live?
  • What disasters are covered and are there any restrictions?
  • Do I already have coverage through a credit card or another insurance policy?
  • What type of assistance does the insurer provide in the event of a medical emergency or other disaster?
  • How is the reimbursement determined?
You can purchase travel insurance through a travel agent or directly from an insurer that specializes in this type of coverage.

For related video, go to Travel Insurance Quiz.

For more information about insurance, go to the I.I.I. Web site.

To learn more about travel insurance, go to the U.S. Travel Insurance Association.

The I.I.I. is a nonprofit, communications organization supported by the insurance industry.

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