Should You Have Travel Insurance?
How to Determine Your Family’s Coverage Needs Before You Pack Your Bags

Planning a family vacation any time soon? If so, you’ll probably buy some new things to take with you. But have you considered buying travel insurance?

Although many travelers are unaware of its existence, today you can buy insurance to cover the cost of many of the things that can go wrong on (or before) a trip. Offered through travel agents and insurance agents, policies are sold either for a flat, per-vacation price, or on a per-day-of-travel basis.

Some policies allow you to purchase coverage against specific risks, while others combine coverage into “packages” insuring against the cost of a number of mishaps that can occur before or during a trip.

What Can Be Covered?

Here are some of the common travel risks that you buy insurance for:

Trip Cancellation or Interruption – This coverage insures you against the loss of your deposit or prepaid expenses in the event your trip or vacation is canceled or interrupted due to illness or injury, or the default or bankruptcy of a company (such as a cruise line or a tour group) that you’re scheduled to travel with. In addition, depending on the policy, coverage may apply to a number of other reasons for your trip’s cancellation or interruption, including:

• Injury, illness or death of an immediate family member or of a traveling companion.

• Hospitalization or death of your host at your travel destination.

• The hijacking or quarantining of you, a family member traveling with you or a traveling companion.

• You, a family member traveling with you or a traveling companion is subpoenaed, required to serve on a jury or is involved in an auto accident en route to leaving on the trip.

• You are required to move due to relocation by your employer.

• You’re a teacher, and the school year is extended past the time you’re scheduled to leave.

Vacation Delay –
This coverage insures you against the loss of your deposit or prepaid expenses in the event your vacation is delayed (generally, for 12 hours or more) due to a number of causes, including:

• Equipment failure or a strike.

• Inclement weather or a natural disaster.

• Loss or theft of money, passports or other travel documents.

Baggage Travel Insurance – Airlines only cover baggage while it’s in their possession, while most cruise lines, tour operators and hotels offer little or no coverage. Baggage travel insurance covers your belongings that are lost, stolen or damaged at any time throughout your trip.

Medical Travel Insurance – This insurance generally covers two expenses:

• Medical evacuation – The cost (which can be quite high) of an ambulance, medical helicopter or other transportation (including, in some cases, transport back to the United States if abroad) that becomes necessary due to injury or illness.

• Accident/Illness – Covers the cost of medical help or hospitalization – not covered by your health insurance – needed while traveling. This is especially important if you’re traveling outside the United States, since medical costs incurred abroad are often not covered by your health insurance, HMO plan or government health insurance.

Life and Accident Insurance – This coverage pays a benefit in the event of the death or dismemberment of an insured person while traveling or on vacation. (See “Travel Insurance Since 9/11.”)

Reparation of Remains – Covers the cost of arranging for an insured’s remains to be returned home in the event of their death while traveling.

Additional Services – Some travel insurance “package” policies also offer you a number of services while traveling. These include:

• Assistance in arranging emergency cash transfers.

• Assistance in finding local medical or dental help, and/or in contacting medical consultation (including your own physician) while traveling.

• Assistance in finding local legal representation while traveling.

• Assistance in replacing important documents – such as passports or tickets – lost while traveling.

Checking the Fine Print

Of course, a travel insurance policy is a contract and, as with all contracts, you should always “read the fine print.” Travel agent Warren Winnick suggests reading the policy exclusions first. “Check to see what’s not covered, then check to see what is covered,” he says. In particular, when reading the policy, check for the following:

• See what insurance you already have. For example, your homeowner’s insurance might cover your belongings while you’re traveling, and you may already have adequate life insurance coverage (see “Travel Insurance Since 9/11”). On the other hand, don’t assume that the insurance you have – especially your health insurance and life insurance – will cover you for expenses incurred while traveling, especially (as noted above) if you’ll be traveling abroad. (Note: Most policies specifically state they don’t pay for costs already paid by another policy you hold).

• Check exactly what the policy covers. For example, if you’ve bought a family vacation package, must each member of your family be specifically named in the travel insurance policy? Or, are you covered if you take a side trip during a vacation tour? Moreover, if you’re traveling abroad to an area or country experiencing civic unrest, see if the policy excludes hijacking- or terrorism-related injuries, or completely excludes all coverage when you’re traveling in that specific area or country (this is especially true since 9/11).

• Pre-existing conditions – See if your policy excludes payment (as many do) on claims for trip cancellation, trip interruption or travel medical insurance if your claim arises from a pre-existing medical condition. If it does, check to see if it offers (as many policies now do) the option of waiving this clause for a small additional premium.

• Check your health insurance to see exactly what it covers. While most won’t cover you while you’re traveling abroad, some will. However, virtually none cover medical evacuation costs when you’re abroad. If you do buy this travel coverage, be certain it covers the cost of transporting you (or a family member traveling with you) home if medically necessary, not just the cost of transporting you to a local hospital or medical center.

• Be sure any travel insurance coverage you purchase is underwritten by an insurance company. For example, trip cancellation/interruption coverage that is underwritten by the cruise line you’re traveling with won’t be much help if the cruise line itself goes bankrupt.

If you have specific questions about the travel insurance you’re considering purchasing, it’s best to direct these questions to the insurance company underwriting the policy.

Purchasing Travel Insurance

OK, now that you know what travel insurance can include, the obvious question is, should you buy it?

For most people, the answer is yes. As noted, many other insurance policies you may have (such as homeowner’s and health insurance) won’t cover you when you’re traveling, especially if you’re traveling abroad. And, even if it does, in many cases the trip cancellation/interruption coverage itself is worth the cost of travel insurance. This is especially true given the fact that travel insurance is, relatively speaking, very inexpensive. Surprisingly, this remains true, even after 9/11 (see “Travel Insurance Since 9/11”).

For example, one travel agency offers a vacation travel insurance package policy – underwritten by an insurance company and including all of the major types of travel coverage listed above (including a pre-existing medical condition waiver) – for a base of $58 per person.

Travel Insurance Since 9/11

The availability of travel insurance has remained relatively stable since Sept. 11, 2001, with one exception – accidental death and dismemberment insurance.

As travel agent Warren Winnick explains: “Today, if you’re traveling to certain countries in the world, because of the threat of terrorism, insurance companies simply won’t write larger amounts of accidental death or dismemberment insurance. Or, they may offer coverage, but at a very high premium.”

What about existing life insurance?

“If you currently have traditional life insurance,” Winnick adds, “chances are it will cover you for travel, worldwide. However, you may want to check with your life insurance agent to be sure. The problem is trying to buy additional life insurance in anticipation of foreign travel. This may be difficult to find, depending on where you travel, or, if you can find it, could be very expensive.”


For more information or a brochure on travel insurance, contact:

Liberty Travel Insurance Help Desk – 1-800-348-8870

• Travelguard – 1-800-826-1300

Travel Insurance Services

• TravelASSIST Magazine, “Travel Insurance