Planning a Winter Getaway? Insurance Is Available in the Event of a Disaster

I.I.I. Provides Tips for Purchasing Travel Insurance

INSURANCE INFORMATION INSTITUTE
Contact: Press Offices
New York: 212-346-5500; media@iii.org
Washington, D.C.: 202-833-1580

NEW YORK, February 14, 2008 - Before sailing off on a cruise or hitting the slopes, make sure that you have adequate insurance to protect your financial investment in a pre-paid vacation, said the Insurance Information Institute (I.I.I.).

"Vacations can sometimes cost thousands of dollars, so it is important to have travel insurance to provide financial protection in case you have to cancel your trip due to illness or some type of disaster listed in policy," said Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I. "Some insurers also offer the option of adding a ?cancel-for-work reasons' endorsement to a travel insurance plan."

Policies can also provide insurance protection if you need to cancel your trip in the event that you are seriously injured or if the cruise or tour operator goes bankrupt. Travel insurance also frequently provides assistance in the case of an emergency, which can be useful for older vacationers or those traveling with children, noted Salvatore.

Specific travel-related coverage can be purchased individually or bundled together as a package. The following is a list of the three major types of travel insurance:

1. Trip Cancellation Insurance reimburses you if the cruise line or tour operator goes out of business. It also provides coverage if you have to cancel a trip due to sickness, a death in the family or other type of disaster listed in the policy. In addition, if you or an immediate family member become seriously ill or injured during the trip, most policies reimburse you for the unused portion of the vacation. Often this type of coverage also provides protection if your baggage is stolen. The cost is generally 5 to 7 percent of the price of the vacation, so a $5,000 trip would cost roughly $250 to $350 to insure.

   Trip cancellation insurance is different from the cancellation waivers that many cruise and tour operators offer. Waivers are relatively inexpensive, costing approximately $40 to $60. They provide coverage if you have to cancel the trip, but they have many restrictions.

   For example, waivers must be purchased when you book the trip and they will usually not cover you immediately before departure (the time period during which most people cancel) or after the trip has begun. Most important, waivers are not insurance-they are not regulated by the state department of insurance, so if your tour or cruise operator gets into financial difficulty you may not be able to collect.

2. Emergency Medical Assistance and Evacuation provides insurance and medical assistance for travelers. For example, it would cover you if you had to be airlifted to a hospital due to a skiing accident, or if you had to stay for a prolonged period of time in a foreign hospital. It also provides coverage if you get seriously ill or are injured and need to be flown to a better medical facility than is available where you are vacationing.

   Before purchasing this type of coverage, check with your own health insurance carrier to find out what type of coverage you already have when traveling abroad and what the coverage limits are. Also, ask if the policy will pay to fly you home or to a country with first-rate medical care.

3. Accidental Death provides a variety of coverages if you or a family member die on the trip. If you have a good life insurance plan and have made other financial provisions for your loved ones, this may be duplicate insurance, so check that you actually need it before purchasing accidental death coverage.

"Before purchasing travel insurance, it is very important that you understand what disasters are going to be covered," said Salvatore. "You should ask yourself why you need the coverage. For instance, if your primary concern is that you might get sick or injured prior to the trip or after the trip has begun, make sure you understand how you would be reimbursed for this type of situation."

The I.I.I. also suggests that you ask the following questions before purchasing travel insurance:

• Is the travel insurance company licensed by the state insurance department where I live?
• What disasters are covered and are there any restrictions?
• Do I already have coverage through a credit card or another insurance policy?
• What type of assistance does the insurer provide in the event of a medical emergency or other disaster?
• How is the reimbursement determined?

You can purchase travel insurance through a travel agent or directly from an insurer that specializes in this type of coverage.

For more information about insurance, go to the I.I.I. Web site.

The I.I.I. is a nonprofit, communications organization supported by the insurance industry.