Bad luck, it seems, never goes on vacation. Hurricanes howl. Volcanoes erupt. Acute appendicitis is just as likely to strike you in India as in Indiana.
When you book a Caribbean cruise or grand tour of Europe far in advance, you’re betting that nothing goes wrong in the ensuing months. You’re betting you stay healthy, your spouse stays healthy, no hurricanes blow through, that your flight from home to the cruise ship’s port city arrives on time. But if — for any reason — you can’t make the trip, you’re out thousands of dollars.
That is where travel insurance or trip insurance comes into play. Trip insurance provides coverage should you have to cancel a trip because of sickness, a death in the family, canceled flight or another mishap listed in the policy. Some travel insurance policies cover the cruise or tour operator going out of business. Some trip insurance policies will cover your losses if your vacation destination falls under a NOAA-issued hurricane warning. Some policies will pay off if you simply change your mind about going on the trip. Such protection is a bit more costly and typically must be purchased within 14 days of booking your trip.
Perhaps more importantly, some travel insurance offers coverage if you become sick or injured while traveling. Medicare does not pay for medical costs outside the United States and most U.S. medical insurance is not accepted outside the country, according to the U.S. Department of State. Trip insurance would not only cover medical care in a distant country, but also medical evacuation back home.
While Americans spent nearly $1.8 billion on all types of travel insurance and assistance services in 2010, just 29 percent of travelers who had their trips affected by natural disasters or world events had travel insurance, according to a survey conducted for the US Travel Insurance Association.
Part of the reason may be cost. While the cost of a travel insurance policy varies according the age of the traveler, the specific coverages selected and the cost of the trip, the average trip insurance premium is equal to about 5 to 7 percent of the cost of the trip, according to the Insurance Information Institute.
The point of a vacation is to relax. You won’t be able to relax for the 11 months leading up to the trip if you’re worried about losing your dream-trip savings to an ill-timed hurricane or broken ankle. So shop carefully for travel insurance at an online broker such as InsureMyTrip.com, which sells coverage from nearly two dozen companies.
Before leaving for the airport, review your travel insurance policy to familiarize yourself with what is covered before and during your trip — for example, did you buy a medical evacuation policy or not? Should you have to file a claim, be prepared to provide medical records and doctors’ notes. Or a death certificate, if applicable.
Author Janice Waugh talks about the documents you should carry with you while traveling.