NEW YORK, July 8, 2016 /PRNewswire-USNewswire/ -- Travel insurance can't prevent bad things from happening on a vacation, but it may be able to protect your financial investment, according to the Insurance Information Institute (I.I.I.).
"For many consumers worried that an extreme weather event or political unrest might affect their vacation plans, travel insurance can provide useful coverage," said Jeanne M. Salvatore, the I.I.I.'s chief communications officer. "But it's important to understand exactly what it covers and when it makes sense to purchase it."
Asking some key questions can help determine whether you should consider purchasing travel insurance:
- If I had to cancel my vacation, would I lose the money I paid in advance?
- Is there a chance severe weather or other events could interrupt my vacation?
- If the tour operator were to go bankrupt, would I receive a refund?
- Is there a chance I might get injured because I'm planning an active vacation (biking, hiking, sailing)?
- Will I be traveling with small children or older relatives who might have special needs?
- Might I need special assistance while on vacation such as an English speaking doctor or dentist?
If the answer to any of these questions is "yes," you may be a candidate for travel insurance.
Most travel insurance policies include three basic types of coverage:
1. Trip Cancellation, Interruption or Delay: Provides coverage if you need to cancel a trip due to sickness, a death in the family, bad weather, delayed shipment of luggage or another disaster listed in the policy. In addition, if you become seriously ill or are injured during the trip, some policies will provide reimbursement for the unused portion of the vacation. (There may be exclusions for pre-existing conditions, so check your policy carefully.)
Some—but not all—travel insurance policies may provide coverage if the cruise line or tour operator goes out of business. And, for an additional fee, some insurers offer a "Cancel for Any Reason" provision, which provides coverage if you cancel a trip due to "the fear of something that may happen," such as civil unrest or a forecast natural disaster.
2. Medical Insurance and Medical Evacuation: Provides coverage if you are injured while traveling—for example, being airlifted off a mountain due to a skiing or hiking accident—or in the event you get seriously ill and need to be flown home. Some commercial airlines require very sick passengers to travel on a stretcher with a medical escort; your travel insurer will usually make arrangements for this.
3. 24-hour Assistance: This service, provided by most travel insurance companies, can help travelers find doctors, arrange accommodations, contact their families or get other forms of assistance in case of an emergency.
4. Other Travel Related Coverages: These include: Accidental Death, should you or a member of your group die during the course of a trip; and Luggage Insurance or Personal Effects Coverage, which provides protection if your luggage and/or personal belongings are lost, stolen or damaged.
The cost of a travel insurance policy is based upon the age of the traveler, the specific coverages selected and the cost of the trip. On average, standard travel insurance policies cost about 5 to 7 percent of the total cost.
Travel insurance is different from the cancellation waivers that many cruise and tour operators offer. Waivers are not insurance; they are relatively inexpensive and provide coverage if you have to cancel the trip, but come with many restrictions. Waivers are not regulated by state insurance departments.
There are many different travel insurance companies and types of policies. Before choosing one, talk to your insurance professional or your travel agent and compare companies, policy coverages, benefits and prices. An easy way to review coverages is to go to Insuremytrip.com.
Also, check your health and homeowners insurance policies, as well as your credit card company, to see what travel related coverages you may already have.
Additional information is also available from the U.S. Travel Insurance Association.
THE I.I.I. IS A NONPROFIT, COMMUNICATIONS ORGANIZATION SUPPORTED BY THE INSURANCE INDUSTRY.
Insurance Information Institute, 110 William Street, New York, NY 10038; (212) 346-5500; www.iii.org.
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SOURCE Insurance Information Institute