I.I.I. Provides Tips for Purchasing Travel Insurance
NEW YORK, August 9, 2005 - Travel insurance provides financial protection for pre-paid vacations in the event of sudden illness, a catastrophic hurricane or even a terrorist attack, says the Insurance Information Institute (I.I.I.).
â€œIf a hurricane destroys your vacation destination, you can purchase insurance coverage to protect your financial investment in the trip,â€ says Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I. â€œThere may also be coverage if there is a terrorist incident within 30 days of departure to the city you are traveling to or the city where you are departing from, travel insurance will provide financial protection.â€
Policies can also provide insurance protection if you need to cancel your trip in the event you are seriously injured or the cruise or tour operator goes bankrupt. Specific travel related coverages can be purchased or bundled together as a package, points out the I.I.I.
Following is a list of the three major types of travel insurance:
Trip Cancellation Insurance
This reimburses you if the cruise line or tour operator goes out of business. It also provides coverage if you have to cancel a trip due to sickness, a death in the family or another type of disaster listed in the policy. In addition, if you or an immediate family member become seriously ill or injured during the trip, most policies reimburse you for the unused portion of the vacation. Often this type of coverage also provides protection if your baggage is stolen. The cost is generally five to seven percent of the price of the vacation, so a $5,000 trip would cost roughly $250 to $350 to insure.
Trip cancellation insurance is very different from the cancellation waivers that many cruise and tour operators offer. Waivers are relatively inexpensive, costing approximately $40 to $60. They provide coverage if you have to cancel the trip, but they 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 most people cancel) or after the trip has begun. Most importantly, waivers are not insurance. Cancellation waivers 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.
Emergency Medical Assistance and Evacuation
This provides insurance and medical assistance for travelers. For example, it would cover you if you had to be airlifted to a hospital due to a hiking accident, or if you had to stay for a prolonged period of time in a foreign hospital. It also provides coverage if you get seriously sick 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 whether there are any limits. Also, ask if the policy will pay to fly you home or to a country with first-rate medical care.
This provides a variety of coverages if you or a family member die on the trip. Generally, if you have a good life insurance plan or have made other financial provisions for your loved ones, this may be duplicate insurance, so check that you actually need it before purchasing accidental coverage.
â€œBefore purchasing travel insurance, it is very important that you understand what disasters are going to be covered,â€ says Salvatore. â€œYou need to ask yourself why you need the coverage. For instance, if your primary concern is that you may get sick or injured prior to the trip or after the trip has begun, make sure you understand how you would be reimbursed for this type of situation.â€
The I.I.I. also suggests that you ask 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 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 from a travel agent or directly from an insurer that specializes in this type of coverage.
Click here for more information on travel insurance.
The Insurance Information Institute is a non-profit, communications organization supported by the property/casualty insurance business. http://www.iii.org/.