Travel Insurance 101 Basic Information about Travel Insurance

Travel Insurance

Bad things can happen when you're about to travel. A hurricane might flatten the Caribbean resort that has your $1,000 deposit. Your flight could be delayed, causing you to miss your connection. Or your boss might send the end-all text message: "You can't go. We have a crisis here" In situations like these, travel insurance is your best protection.

Travel Insurance Options

Today, you can buy travel insurance to cover you if you want to cancel your trip because of terrorist incidents, hurricanes, or even job responsibilities. Access America, for example, offers BizPack Expanded Coverage for business-related cancellations caused by work, company mergers, or business damage from a natural disaster, fire, flood, or vandalism. Other companies offer "cancel-for-any-reason" insurance, although it costs more and typically
has restrictions.

You can buy travel insurance through your travel agent or various websites. "Travel agents bring consulting expertise and can help you figure out which policy is right for you," says Emily Porter, Access America's vice president of communications.

Travel Insurance Terms

Trip cancellation and trip interruption insurance typically reimburse you for non refundable, prepaid expenses if you need to cancel or interrupt your trip. Other types of policies cover anything from lost luggage to medical evacuation. Insurance typically can be purchased for 4 percent to 8 percent of the cost of your trip, depending on the type of coverage.

"Though we hope never to use or need it, travel insurance can provide a tremendous amount of security and peace of mind for a small fraction of the cost of a trip,"

says Peter Evans, executive vice president of InsureMyTrip.com, a travel-insurance information website

When to Buy Travel Insurance

Buy travel insurance at the same time you pay for your trip. Otherwise, you risk missing 15-day deadlines that various insurers set. If you're being treated for an illness and purchase travel insurance within 15 days of making an initial trip deposit, for example, the policy should cover any travel cancelled because of that preexisting medical condition, says Dan McGinnity, vice president of Travel Guard International.

Timing is critical. Just as you can't buy fire insurance for a house that's burning, you can't get hurricane coverage once a storm has been sighted, and you can't buy terrorism insurance after an incident has occurred at your destination. Here are some travel insurance tips from Emily Porter, Access America's vice president of communications.

Shopping for Travel Insurance

Find out if your traditional health insurance will cover you while you're out of the country. Ask when, where, and to what extent you are to determine if you need additional coverage.To protect yourself from financial default, buy a policy from an insurance carrier. If you buy insurance (more typically called a waiver) from your cruise line or tour company, you won't be covered if the company goes bankrupt or can't provide service.

Once you purchase a policy, read it carefully and call the insurance provider if you don't understand the requirements. Should you have to cancel your trip due to a medical problem, for example, you must be examined by a doctor within a set period of time and get the doctor's advice against travel in writing.