Guide to Travel Insurance
It's fun to think of the great time you are going
to have on your vacation, but what if something goes wrong? What if you
get sick with the Norwalk virus, or you have to return home when a family member
is hospitalized with a serious illness? You can lose part or all of a
prepaid trip (such as a cruise), or you can incur thousands of dollars of
Travel insurance can help with unexpected
expenses. An excellent discussion of travel accident and medical
insurance, as well as trip cancellation insurance, can be found on
But there are substantial differences between
different travel insurance policies. Let's take a look at the
different types of policies, and what we recently found when we were
researching travel insurance for an upcoming trip with a company that
specializes in bus tours worldwide. First up was a travel insurance
policy that is sold by the tour company. They make this process simple
-- just check a box and you're insured. But, as you'll see shortly,
that was the worst option for this trip. Next, we have two separate
policies that are issued by independent travel insurance companies, not
affiliated with any tour company, cruise line, or travel agency. We've
named these Company A and Company B (they are in the list on Frommer's
website, but we haven't used their names). Here's a quick breakdown:
1. For Trip Cancellation coverage, are you
covered if you have to cancel your trip when a close relative (father,
brother, sister, etc.) is hospitalized? How about if they die?
-- Tour company - No if hospitalized, Yes if they die
-- Company A - Yes for both questions
-- Company B - Yes for hospitalized but only if life
threatening, Yes if they die.
For Trip Cancellation coverage, are you covered if you cancel your trip
because you are summoned to serve on a jury, or are involved in an auto
accident on the way to the airport and miss your flight, or if you are laid
off from your job and need the money?
-- Tour company - No to all
-- Company A - Yes to all
-- Company B - Yes to only jury summons
3. Once you are on your trip, something very serious may happen at
home. Are you covered for the refund of the unused portion of your
trip expense if you have to return home due to a hospitalization or death of
a family member?
-- Tour company - No
-- Company A - Yes
-- Company B - Yes, if hospitalization is for life
threatening illness or accident, Yes for death
4. Once you have made your final payment,
you find that you are unable to travel due to circumstances that are not
covered by your insurance (or maybe you just change your mind). Can
you recover the amount you have paid?
-- Tour company - Yes, with refund made in vouchers
good for future travel (less the nonrefundable deposit)
-- Company A & B - No
As you consider the purchase of travel
insurance, think about the scenarios where you will want or expect coverage.
Then you will need to read the policies offered by each company (they're all
online at the companies' websites). Reading the policies is no fun,
but they are understandable if you know what your concerns are and can look
for coverage in the policies. The examples above are just some of the
many scenarios that might impact your trip, and of course what is important
to one person may not be important to another, and vice versa. One of
our favorite sites for comparing travel insurance plans is
QuoteWright, where you can see parts of the
actual policy language.
Travel Tip -- if you have questions, do not rely on a verbal
explanation of coverage from your travel agent. You can always e-mail
the insurance company and ask them your questions, and you will then have
the answer in writing.