Make Sure Your
Travel Insurance Actually Insures Your Trip
If you’ve got so
much as a missed flight connection, it won’t take much to put your
eagerly-anticipated vacation in jeopardy. The U.S. Transportation
Department reported in July that U.S. airline delays worsened in May for a
fifth straight month while the passenger-complaint rate surged 45 percent.
Delays in May kept 2007's on-time arrival rate at the worst since 1995.
Weather delays,
terrorism scares and general overcrowding in the skies have led to plenty
of frightening and frustrating travel news. If you’ve ever been stuck on
the airport tarmac for hours or had a flight cancelled on the way to a
brief but desperately needed vacation, you’ve probably faced the
irritating possibility of losing hundreds or thousands of dollars of your
hard-earned vacation savings.
So you’ll just
click on the travel insurance button next to your online flight
reservation and you’ll be fine, right? In the majority of cases, you’d
be wrong.
Most people perceive
that the purchase of travel insurance will protect everything from lost
luggage to unforeseen medical bills – that’s rarely true anymore. So
when shopping for travel insurance it’s time to start understanding what
you’re really buying:
Start at least a
month in advance: Most
people make major trip reservations fairly far in advance to get the best
fares, and you need to do the same for travel insurance. Book early and
you’ll get the best coverage and rates. Also, make sure you’re not
having any major medical or dental procedures before you go – insurers
are picky about pre-existing health conditions, so read the fine print.
There’s no such
thing as full coverage – unless you’re willing to pay for it:
What’s full coverage? That’s a good question, and it sometimes depends
on dozens of factors unique to your trip. Your carrier might not offer
protection on your chosen airline or cruise line. You’ll find that
terrorism insurance is rare and complicated. And you have to examine
medical insurance options closely to understand exactly what is covered.
The rare soup-to-nuts coverage – covering trip cancellations, missed
connections, lost luggage, flight accident, emergency medical and medical
evacuation coverage – is typically priced in the hundreds of dollars and
may only cover only up to 75 percent of the total cost of your trip. But
in a pinch, it may be worth it.
Start online:
If you really want an eye-opening experience in buying travel coverage, go
to some of the leading Web sites that deal in single or multiple-insurer
offerings. InsureMyTrip.com is a market leader and a good first stop in
analyzing coverage – you start by punching in the necessary information
on your trip (dates, age of travelers, medical coverage needed, etc.) and
it spits back more than a dozen possibilities at all price levels.
Clicking on any of the choices will give you a detailed view of what those
policies will and won’t cover.
Check with your
credit card company: It’s
time your credit card company earned its money. Call customer service and
find out what kind of travel protection they offer automatically or by fee
and grill them on the coverage.
Call your HR
department or health insurer:
Your health benefits may not cross state or country lines. Before you take
any trip, check to see if your employer’s or your own personal health
coverage will be effective there. An emergency room visit can cost at
least several hundred dollars and a short hospital stay can cost thousands
more, particularly in another country. You might be interested in travel
health insurance if you find your own domestic insurer won’t pay claims
in certain parts of the country where you’re going.
Ask about
hurricane coverage: The
2007 Atlantic hurricane season began June 1 and runs through Nov. 30. Even
if you don’t live in a hurricane area, severe hurricanes can disrupt
flights all across the nation, which may lead to a delay of your trip here
or abroad. Ask whether your travel insurance has hurricane coverage and
what it entails.
If you’re
stuck, never be afraid to ask for a break: If
you’re sidetracked for reasons beyond your control, (weather-related or
otherwise), always ask if your airline, hotel or other components of your
vacation might be willing to give you a credit or discount on your bill.
It’s rare, but some destinations might see it as a chance to build
goodwill. Always ask nicely – don’t ask as if they owe you, because
they don’t.
August 2007— This column is
produced by the Financial Planning Association, the membership
organization for the financial planning community, and is provided by
McGuire & Co., LLC, a local member of the FPA.
(Back to
Financial Planning Page)
