Travel Insurance Provides Important Financial Protection For Expensive, Pre-Paid Trips In Uncertain Times

Concerns About Swine Flu (H1N1 virus), Tour Operator Bankruptcies and Other Disasters Make Travel Insurance Worth Considering

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

NEW YORK, May 20, 2009 — Travelers who are tempted to take advantage of today’s numerous vacation bargains, but afraid to part with their hard-earned cash if a trip is canceled due to unforeseen events, should consider purchasing travel insurance, according to the Insurance Information Institute (I.I.I.).

“Travel insurance is a smart investment for anyone taking an expensive pre-paid vacation where they would lose the cost of their trip if they needed to cancel due to sickness, loss of a job, hurricane or other disaster,” said Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I. “It also provides important financial protection if the tour operator goes bankrupt or if a traveler gets injured while on vacation.”

Michael Ambrose, president of the U.S. Travel Insurance Association noted that travel insurance provides a broad scope of pre- and post-departure coverages. “These include delays, missed connections, baggage, medical/sickness, medical evacuation and travel assistance services,” he said. “With the travel assistance services contained in most travel insurance plans, a traveler can rely on a wide range of services available 24/7, and usually via a toll-free number.”

The cost for a comprehensive travel insurance policy, covering both domestic and international trips, is generally 4 to 8 percent of the total price of the vacation. A $5,000 trip would cost approximately $200 to $400 to insure.

Most travel insurance program rates are based upon the age of the traveler and the cost of the trip. Many of the programs have additional options and add-on’s enhancing coverage or benefit amounts.

With the optional "Cancel for Any Reason" coverage, insured travelers would even be covered if they canceled their trip due to the fear of contracting the swine flu (H1N1) virus. Some travel insurance policies include coverage for trip interruption and travel delay if a traveler is quarantined in an area because of possible contact with the H1N1 virus or other diseases.

Many travel insurers are now providing travel assistance information as well as medical referrals to travelers in transit who believe they may be experiencing H1N1 virus symptoms. Some are also providing updates related to the current H1N1 virus situation on their Web sites.

Trip cancellation insurance coverage is different from the cancellation waivers that many cruise and tour operators offer because waivers are not insurance. Waivers are relatively inexpensive, costing approximately $40 to $60. They provide coverage if you have to cancel the trip but they have many restrictions. Moreover, cancellation waivers are not regulated by state insurance departments so if your tour or cruise operator gets into financial difficulty, you may not be able to collect whatever monies you have already given them.

Other coverages in a trip insurance policy include:

• Travel Medical, which provides assistance to travelers who get sick or injured while on vacation as well as coverage for time in a hospital in a foreign country. Those planning long vacations (six months or more) should consider a longer term Medical Travel Insurance policy. An important feature to consider is whether the plan you are buying provides for the insurer to make a direct, immediate payment to the medical provider. 
• Emergency Evacuation Costs can cover you up to about $1 million if you have to be airlifted from a remote place where an accident occurred, or if you need to be flown back home or transferred to a hospital suitable for your particular case. Some insurers will evacuate you, if necessary, from any country worldwide and, if you are at least 99 miles away from home, will transport you to a hospital of your choice. 
• Accidental Death/Flight Policy provides up to about $50,000 in coverage if you or a family member die on a trip. However, if you have a life insurance policy or have made other financial provisions for your family, this may be duplicate insurance. 
• Luggage Insurance or Personal Effects Coverage provides coverage if your luggage and or personal belongings are lost, stolen or damaged during the trip. 
• Trip Delay and Interruption provides coverage if your flight is delayed because of storms or other weather conditions, or if you have to interrupt your trip because of illness.

“A comprehensive travel insurance plan that includes travel delay, trip interruption, medical expense and emergency medical evacuation coverages as well as 24/7 emergency medical and travel assistance will give you a wide array of benefits under one umbrella,” said Ambrose.
More information on travel insurance is available from the Insurance Information Institute the U.S. Travel Insurance Association.

For a related video, go to the I.I.I.’s Travel Insurance Quiz.

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