Knowledge and Insights

There are many types of insurances with which we all are familiar, including medical, automobile, life, etc.  Another type of insurance known to some is  travel insurance. Maybe you noticed that little check box on airline, cruise and vacation websites when you book your reservations.  Do you know what it is, and, more importantly, do you need it?

The purpose of travel insurance is to protect the consumer against financial losses from various unforeseen events.  What comes to mind most frequently is reimbursement for the cost of the trip (hotel or airfare costs) due to adverse weather conditions, such as a hurricane.  This is called trip cancelation or interruption insurance.

Did you know travel insurance can also cover these situations: the cost of unforeseen medical expenses not covered by health providers, such as a serious medical illness or accident; the financial default of the travel supplier; and, in some cases, an act of terrorism?

When considering whether or not to purchase travel insurance, ask yourself:

• What insurance do I have already and what does it cover?
• Will my health-care provider cover routine medical expenses, emergency treatment, or medical evacuation if I travel outside of the United States?
• How much money can I afford to pay for uncovered medical expenses?
• How much money can I afford to lose out-of-pocket if my trip is cancelled?
• Does the coverage offered by the travel insurance policy outweigh the cost of the premium?

Travel insurance policies may include a broad spectrum of coverage; be customized to avoid duplication of existing coverage; and be a short-term solution to supplement existing coverage.  It’s important to understand the risks and unforeseen costs of a trip if something goes wrong.  You then can better assess the options available to protect against those risks and at what cost.  A travel professional should be able to help.  So before you take that next cruise, consider your risks.

The author of this article, Linda K. Soley, is a former employee of Mercadien.