To decide which policy is right, first identify your concerns. Are you looking for trip cancellation insurance in case you get sick or need to return home early or can’t go at all? Or are you looking to protect yourself against a trip being interrupted or delayed.
Next step: price it out. Costs can vary from about 3 to 16 percent or more of the total trip price, depending on the traveler’s age, and the cost and length of the trip.
It’s important to understand the limitations of various policies. In situations where potential problem scenarios aren’t covered, or you’re concerned about loopholes, consider purchasing a “cancel for any reason” option, which allows a traveler to cancel a trip for any reason whatsoever, no questions asked. Please note that such policies come at a price.
In general, strikes by workers on airlines or trains are “named perils” and, if specified in the policy, are covered, though the insurance should be purchased before a strike is announced.
Oil spills are not typically “named perils” and are usually not covered. Insurance is a highly regulated industry, and new perils such as oil spills the size of the one in the Gulf of Mexico are typically not included in existing policies. If you want potential coverage for trips impacted by an oil spill, purchase a plan with a ‘cancel for any reason’ option.
Hurricanes are covered as weather events or natural disasters, and insurance must be bought before the storm is named. Also, your destination would have to be made uninhabitable or your flight unable to leave for a minimum of 24 hours in order for the policy to pay out. The most important thing about coverage for a hurricane is that it’s got to be unforeseeable at the time of purchase. If you cancel your trip out of worry or fear, you will need ‘cancel for any reason’ option.
Medical expense and medical evacuation insurance covers urgent medical assistance when something unforeseen happens while you’re abroad, or when you need to be evacuated. Both are usually part of a comprehensive travel insurance policy and are included in the price.
You should also make sure you understand your existing insurance policies (medical, for instance) and what it covers when you’re traveling. Some cover medical emergencies for its members when they’re traveling abroad others provide little or no coverage outside the United States, so purchasing travel medical insurance can be an important consideration.
Finally, know whether the policy provides primary or secondary coverage. Primary coverage tends to be more expensive, but the company pays claims first. If you’ve purchased secondary coverage, you’ll have to first tap your homeowners’, personal medical or other insurance that might apply.
