Columns

July 24, 2009

Inside Insurance: Travel insurance to the rescue

Somebody says, “Let’s go on vacation!” Next comes the biggie. Where?

“Let’s take a Caribbean cruise. I hear they have real bargains this summer.”

Ever wonder why there are such great travel rates on the S.S. Minnow? Late summer and early fall are generally the peak of the hurricane season.

A family member of mine took one of those great-rate cruises several years ago, and wouldn’t you know it? There he was, right in the middle of a hurricane. That was the first and last time the couple took up smoking, but they made it through the storm and now they understand cruise line rate structures.

Adequate travel insurance won’t help much once you are at sea and the wind is blowing at about 80 miles per hour.

There are, however, several potential unforeseen events against which you can protect yourself financially. It’s not just the issue of a tour operator going bankrupt or you need to cancel because of a sudden and serious illness.

Consider that insurance coverage can include trip cancellation, lost baggage, medical or dental emergency evacuation. Some policies can include accidental death coverage or even collision/damage coverage for rented cars. Your U.S. insurance carrier’s policy may not be valid during travel to foreign nations.

In general, a travel insurance package will run about five to seven percent of the price of the vacation. For instance, a $5,000 adventure could be covered for between $250 and $350 for insurance but price your coverage carefully.

Caution: Trip cancellation and a cancellation waiver that are offered by many cruise and tour operators are not the same. While waivers may cost about $40 to $60, they do provide coverage if you have to cancel your trip, but watch out for the restrictions. Many of these waivers do not allow for last-minute cancellations. Another caution is that these waivers are not insurance, and therefore are not regulated by state insurance departments.

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