The ins and outs of Travel Insurance by Seattle Times
After the Iceland volcano’s ash cloud forced the cancellation of thousands of European flights, more people are considering travel insurance.
Insurance companies reported a spike in inquiries. But do you need travel insurance, which can cost 4 percent to 8 percent of the trip price? That’s an extra $100 to $200 on a $2,500 vacation.
“The travel-insurance companies would sure like you to think you need to go on a trip with their product,” says Christopher Elliott, reader advocate for National Geographic Traveler (and a columnist at seattletimes.com). “That’s not true at all.”
You don’t need travel insurance if you’re traveling within the United States. You likely won’t need it if you’re healthy and taking a short trip abroad to a country with good medical care. And you should always review existing insurance and credit-card benefits to make sure you aren’t already protected for travel mishaps.
Travel insurance does make sense if you’re spending thousands of dollars on a dream vacation and you either can’t afford to lose the money or fear you will miss a flight connection.
And it’s wise to buy a travel-insurance policy that provides medical coverage/emergency evacuation if you’re headed to more remote areas or places where high-quality health care isn’t widely available. “The last thing you want to do is be stuck in a Third World country with a serious medical condition,” says National Geographic’s Elliott.
Even if you’re not going to an exotic locale, consider a policy if your health insurance won’t cover you overseas and you’re concerned about potential medical bills; a medical evacuation can costs thousands of dollars.
About 30 percent of travelers buy insurance, triple the figure before the Sept. 11, 2001, terrorist attacks, says Jim Grace, president of the U.S. Travel Insurance Association.
Most insurers viewed this spring’s volcano eruption as a natural disaster or weather problem and initially covered travelers (who had already bought insurance) whose trips were canceled or interrupted, Grace said. “These type of events is what travel insurance covers,” he said.
Of course, if you want insurance because you’re worried the Eyjafjallajokull volcano will disrupt a future trip, you’re too late. The volcano now is considered a foreseeable event, so insurers won’t cover it if a policy was purchased after mid-April. However, Grace said the majority of insurers will cover policyholders if a different Icelandic volcano acts up.
Check your coverage
Travel policies typically reimburse you for nonrefundable expenses incurred as a result of a trip gone awry. Many offer protection if you cancel because of an illness or injury and will cover you if travel is interrupted or connections missed. They often provide health-care coverage and medical evacuation. Some policies got you covered if you lost a job and no longer can afford the trip.
Before plunking down money for a policy, make sure it doesn’t duplicate existing coverage.
Airlines, for instance, will reimburse you up to $3,300 for lost luggage in a domestic flight (but there are exclusions on what’s covered). Limits on international flights (set through international civil-aviation agreements) vary with currency fluctuations.
Your homeowner’s policy might reimburse you for lost luggage, although you might not want to make a claim if it causes premiums to shoot up or your insurer to drop you later, experts advise.
A credit card may offer travel perks when used to book travel. Some high-end credit cards, for example, will insure lost or stolen luggage, certain medical expenses, car rentals and trip cancellations or pay a death benefit if you die.
Check your health insurance to see if it will cover you outside the country. Medicare, the program for those 65 and older, generally doesn’t, but some supplemental Medicare policies do.
Shop around
If you decide you want travel insurance, buy it within seven to 21 days of putting down your initial deposit to get the maximum coverage, Grace said. If you buy later, pre-existing health conditions, terrorist acts or the bankruptcy of your tour operator won’t be covered.
Shop around. Compare policies online at sites such as Squaremouth.com and InsureMyTrip.com.
Read the terms carefully. Policies can sound the same but have significantly different limits or exclusions.
“There are always loopholes, and people don’t read the policy,” says George Hobica, founder of Airfarewatchdog.com. For instance, if you cancel a trip because you’re sick but don’t see a doctor, the insurance won’t pay, he said.
Call the insurer if you’re not sure what will be covered, Hobica says.
You might not need comprehensive coverage. But travel experts agree that if you are venturing into exotic locales, you should consider medical evacuation coverage.
