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A Tour of Travel Insurance : Travel Insurance Tour

March 24, 1985|BETTY HUGHESBD Assistant Travel Editor and

Read all the fine print on travel insurance policies concerning what could happen--accidental death, dismemberment, loss of sight, trip cancellation, bankruptcies, tour company defaults, hijackings, lost baggage, stolen passports, medical evacuation--and it's a wonder that anyone ever leaves home.

However, you should quickly realize that the insurance companies are getting richer daily because these things seldom happen to the vast majority of policy holders. After this you can begin your trip with peace of mind.

Like all insurance, travel policies take many forms. Simplified, it means a guarantee against loss or damage to life and property by paying a premium in proportion to the risks involved.

When you look at the premium for flight insurance, say just $10 for $300,000 worth of insurance, you'll begin to get an idea of how safe air travel really is.

High Cost of Searching

On the other hand, should you insure your luggage and personal effects for $500 during a two-week trip, the premium is double that of the $300,000 policy. Why? Lost, delayed and misdirected baggage is a big problem. It costs the airlines about $50 million a year just to search for missing and misdirected bags.

At today's hectic travel pace, baggage insurance is a must, and not just for airline trips. On a typical three-week tour of Europe, for example, just one bag makes anywhere from 32 to 50 transfers in airports, buses, hotels and points in between.

Next, look at the wisdom of trip cancellation and trip interruption insurance: a good idea or a waste of money? The choice is yours, but remember that in the last six years, 120 airlines have gone out of business through bankruptcy or simply called it quits. Consider, too, that about 10,000 passengers are bumped from flights each summer month. This isn't even considering the main purpose most people take out such insurance--personal problems such as sudden illness, accident, etc. With those odds, trip cancellation/trip interruption insurance is almost a must these day.

Buying travel insurance is easy. Buying the right policy is not so easy. The problem lies not so much in the legalese of the policies, which is getting better, but simply in the fact that there are so many different coverages, so many variations from so many companies that selecting the right policy at the right price is a challenge.

Check Current Policies

Before looking for more coverage, check those policies you already have: You may be protected through existing homeowners, tenant, life or other personal insurance. Or perhaps you have a group policy that covers some travel aspects that you may have forgotten or overlooked. These could be through a lodge or association, a company or business policy, etc. Probe these carefully before buying more (perhaps unnecessary) insurance for travel.

There are four major types of insurance available for today's traveler: trip cancellation/interruption, baggage and personal-effects insurance, accident/sickness protection, medical evacuation.

Trip Cancellation and Interruption--A good policy should cover: any loss of deposit if you are forced to cancel your trip prior to departure; any additional expenses if you are required to postpone or miss an initial original flight for a more expensive alternate; reimbursement in case of bankruptcy or default of any airline, cruise line or tour operator; reasonable expenses should your travel be delayed or should you be forced to interrupt your trip. The best policies also cover you for additional expenses required if a travel companion cancels and you must pay higher occupancy rates at hotels, etc.

Baggage Insurance--Your policy should pay for baggage and personal effects if they are lost, stolen or damaged; provide a sum (usually $100) for emergency purchase of essential items if baggage is delayed more than 24 hours. Note: There are many limitations and exclusions among the many different baggage policies offered, so check these carefully.

Accident and Sickness Protection--Insurance should pay a specific maximum amount selected by you for loss of life, limb or sight. Some policies have a double indemnity clause for travel in a public conveyance or common carrier. It should pay medical expenses for injury or illness while traveling. Some even include ski injuries and dental emergency treatment. In others, the language is ambiguous. Note: There are a number of exclusions and limitations in these policies. The big one is that no company will pay for treatment during your trip for any illness you've suffered 90 days prior to departure.

While travelers with Blue Cross/Blue Shield or other medical plans covering foreign destinations may not wish additional travel accident/sickness protection, be aware that Medicare coverage does not include accidents or illness that occur outside of the United States.

Also you should learn what type of coverage is offered by the various travel illness/sickness policies.

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