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 Before
leaving on vacation, make sure you have adequate insurance.
Vacations can sometimes cost thousands of dollars so
it is important to have the proper insurance protection
in case the cruise or tour operator goes bankrupt or
you need to cancel the trip due to illness or other
unforeseen events.
There are four major types of travel insurance:
1. Trip Cancellation Insurance
This would reimburse you if the cruise line or tour
operator goes out of business. It would also provide
coverage if you have to cancel the trip due to sickness,
a death in the family or another calamity listed in
the policy.
In addition, if you or an immediate
family member becomes seriously ill or is injured during
the trip most policies would reimburse you for the unused
portion of the vacation.
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 is very different
from a Cancellation Waiver 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.
They must be purchased when you book the trip and will
usually not cover you immediately before departure (the
time period 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.
2. Baggage Insurance or Personal
Effects Coverage
This would provide coverage if your personal belongings
are lost, stolen or damaged during the trip.
To insure $1,000 worth of personal
belongings for a week, it would cost roughly $50 per
year.
Before purchasing this type of coverage,
find out how much insurance the airline or trip operator
provides for your belongings.
Also, check your homeowners or renters
policy. It will usually provide coverage for off-premises
theft. Therefore, if your luggage is stolen, your insurer
will pay to replace it, less the deductible.
If you are traveling with expensive
electronic equipment, jewelry or sporting gear, it might
be more cost-effective to purchase a floater or endorsement
to your homeowners or renters policy. The cost to insure
a $1,000 ring would be between $10 and $40 annually.
This would provide full coverage for the item, anywhere
in the world, usually for one year.
3. Emergency Medical Assistance
This provides insurance and medical assistance for travelers.
It would cover you if you had to be airlifted off a
mountain due to a skiing or hiking accident, or if you
had to stay for a prolonged period of time in a foreign
hospital. It would also provide coverage if you got
seriously sick or were injured and needed to be flown
home. Some commercial airlines require very sick passengers
to travel on a stretcher with a doctor. This means that
you might have to purchase 10 or more seats on a plane
at a possible cost of over $10,000.
Before purchasing this type of coverage,
check with your own health insurance carrier. Find out
what type of coverage you have when traveling abroad
and if there are any limits. Also, ask if the policy
will pay to fly you home or to a country with first-rate
medical care.
4. Accidental Death
This provides a variety of coverages if you or a family
member die on the trip. If you have a good life insurance
plan or made other financial provisions for your loved
ones, this may be duplicate insurance.
Your credit card company may provide
travel-related services and coverage. You can also purchase
travel insurance from either a travel agent or you can
buy directly from an insurer that specializes in this
type of coverage.
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