Inclement weather can affect travel any time of the year, just as delays or cancellations of flights can be traced to numerous causes. However, traveling during hurricane season can particularly daunting — flights can be delayed or canceled, resorts can close or force evacuations and it can rain... a lot.
With the cost of air travel and room rates soaring, a vacation is often a major purchase and it is important to protect your investment. How do you do that? Purchase travel insurance.
What does travel insurance cover? When purchasing travel insurance it is important to know what it does and does not cover. Travel insurance is a “Named-Perils” insurance. That means that it’s an insurance policy that only provides coverage on losses incurred from specific risks covered by the policy. The four basic types of travel insurance are:
- Basic flight insurance that covers injury or loss of life in case your plane crashes. It is the least expensive of travel insurance — about four percent of your trip cost — and pays a lump sum. It’s important to note that you are not likely to collect this insurance… your beneficiary would, and then only if your plane were to crash.
- Trip cancellation and interruption insurance is based solely on trip costs. This is probably the most frequently purchased travel insurance. Insurance packages are designed to pay if your trip is canceled before you get started or interrupted after you’ve left and its cost is dependent on what the package covers. It may pay for cancellation if you get hurt or sick, travel delays, missed connections, canceled flights or cruises and delayed and lost baggage.
- Medical evacuation insurance is sold either on per trip or multi-trip basis, one day to one year policies costing $20 to $400. Depending on the policy purchased, if you become ill or injured, this coverage will pay for transportation to either the nearest hospital or hospital of your choice.
- Bad weather or infectious disease insurance will pay in the event of a weather-related cancellation like for a hurricane or when the threat of infectious disease causes travel delays or cancellations. If it rains during your trip, you may have a miserable time, but you won’t have a claim.
When do I need travel insurance? Travel insurance usually pays for parts of a trip that are not reimbursable by the travel provider in case a traveler has to delay or cancel a trip, or to help cover the cost of meals and accommodations if a traveler is stranded. Only you can decide your level of risk vs. costs. Are you willing to risk losing your prepaid fare on a cruise if you become too ill to travel? Do you have the financial means to provide your own meals and hotels if stranded? Will the travel insurance policy provide enough protection to justify its cost?
What will travel insurance cost? Travel insurance adds between four and eight percent to the cost of your vacation, but it is worth it particularly during hurricane season. There is no reason to pay more than once for any insurance coverage. Before you buy travel insurance you be sure to check your health insurance to see if emergency treatment would be covered in the location you will be traveling. Also, check your homeowners and auto insurance policies to see if they include travel insurance coverage. Some of these policies include coverage for liability and personal property no matter where you are... even on vacation. Finally, if you use your credit card to book the entire cost of your travel some types of travel insurance is included. Check your credit card agreement for details.
When purchasing travel insurance, it is important to read all documents carefully. Coverage limitations and exclusions are often in fine print. The most common travel insurance exclusions are:
- Adventure travel such as parachuting, mountain climbing, hang gliding, bungee jumping, scuba diving, etc.
- Fear is not covered. If you should decide to abandon your travel plans because you’re afraid of a subway bombing, airline strike, volcanic cloud or a hurricane lurking? You’re likely not covered.
- Pre-existing medical conditions will not be covered unless policy offers a waiver.
- Rain may make your vacation miserable, but rain alone is not covered unless it keeps you from getting to your destination.
- War whether declared or undeclared.
Remember these tips when you are considering purchasing travel insurance:
- Buy travel insurance from a third party, never from your travel provider (tour operator, cruise line, etc.). If the company fails to provide contracted travel arrangements, you may find the insurance is worthless as well.
- You must purchase travel insurance before a hurricane is named to protect against this risk.
- Compare travel insurance policies for coverage, price and company stability. For comparison shopping, try SquareMouth.com , InsureMyTrip.com or QuoteWright.com.
- Use your credit card to purchase travel for its travel insurance and purchase protection benefits.
The bottom line is that only you can decide if you need travel insurance. Your final decision to purchase travel insurance may depend on your health or finances. Or, like many other insurance purchasing decisions, it could simply be a matter of peace of mind... it’s better to have it and not need it than the other way around.
