With the disaster in Japan and the temporary closure of several Hawaii hotels, it’s a reminder than even the most well-planned trips can benefit from insurance. What kind of coverage do you honestly need—comprehensive, medical-only, or financial default? Do you even need trip insurance at all?
Know What Kind of Insurance is Right for You
Comprehensive trip insurance is valuable if you’re booking an expensive or complicated trip (particularly to an isolated region) or if you’re booking far in advance. Such policies typically cover trip-cancellation and interruption, letting you cancel or cut your trip short because of a personal emergency, illness, or, in some cases, acts of terrorism in your destination. Such policies also cover evacuation and medical care. Some also cover trip delays because of bad weather or mechanical problems, as well as lost or delayed baggage. Insurers include:
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Another type of coverage to look for is financial default—that is, when your trip is disrupted because a tour operator, airline, or cruise line goes out of business. Generally you must buy this when you book your trip or shortly thereafter, and it’s only available to you if your operator isn’t on a list of excluded companies.
Medicare, Medigap, or some private insurers do not cover medical expenses outside the United States (including aboard a cruise ship, even if it leaves from a U.S. port). Medical-only policies typically reimburse you for medical care (excluding that related to preexisting conditions) and hospitalization, and provide for evacuation. You still have to pay the bills and await reimbursement from the insurer, though. Some companies that offer medical-only coverage:
Some online booking sites also have insurance. Expedia.com offers Package Protection Plus plans, which start at $40 per person, on air-hotel vacation packages it sells. If you cancel or change—for any reason—you’re entitled to a refund on trip deposits, airline-change fees, and booking fees. The plan also includes travel- and baggage-delay reimbursements, travel-accident protection, and other things. Airfare refunds are contingent upon whether the fare was a published one or an Expedia-negotiated one. If you want coverage for airfare alone, you can buy a separate, more restrictive plan.
Read the fine print.
When investigating policies, press for details. With trip-cancellation insurance, for instance, be sure to ask whether you’re covered should you back out because of terrorist attacks, civil unrest, or natural disasters in the destination, you’re laid off from a full-time job at home, or you have an unforeseen conflict at work. With medical insurance, inquire about preexisting condition issues and coverage if you’re injured participating in risky sports (mountain climbing or skiing, say). If the things that concern you aren’t covered, you may need to look into add-ons like "any reason" cancellation coverage or adventure-sports coverage.
Expect comprehensive travel-insurance policies to cost about 4% to 7% or 8% of the total price of your trip (it’s more like 8%–12% if you’re over age 70). A medical-only policy may or may not be cheaper than a comprehensive policy. Always read the fine print to make sure that you’re covered for the risks that are of most concern to you. The easiest way to compare policies is online:
- InsureMyTrip.com and TotalTravelInsurance.com have information from 17 insurers.
- Squaremouth.com has lists prices and policies for 15 insurers.
- QuoteMyTrip.com has prices and policies for more than 40 insurers.
To get the most of your coverage, buy insurance when you book your trip. And, before you do buy, go over not only your personal insurance coverage but also coverage that may be provided by a credit card used to purchase travel services. It’s a waste of money to be covered for the same things twice.
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