Is travel insurance necessary? How to choose.
Nov 29 '00
One issue that often comes up with arranging travel is the necessity of travel insurance. Many people just assume it's the travel agent trying to make more money off of a sale, but that's not the case. Do the agents make money off insurance? In many cases yes. But (and this is a big one) it is important coverage for you and your family.
Nobody likes to think of the various things that could happen to cause him or her to cancel or shorten a vacation. But stuff happens, no matter how well you plan it out. In the end it really is a matter of do you pay the cost of the insurance or lose the cost of the vacation? I'd even go one further and say just consider the insurance another part of the vacation cost - like port charges.
Travel Insurance covers you if for some reason (and it has to be a good one, not "I changed my mind" or "I had an important meeting") your vacation got squelched. These reasons are of course health reasons, and other issues where you may not have an option but to cancel (like jury duty). Read carefully before you get a policy though, so you know what's covered and what isn't.
I've personally witnessed where people had to cancel because of something that happened, and because they declined insurance they lost their entire vacation investment. I had an instance where a client (in my previous life as an agent) opted not to take insurance because he had a broken leg and the cast was coming off the day before his trip. In his words, "What could possibly happen to me, I can't even walk anywhere!" Well the cast came off the day before and he went out with friends, slipped and broke his other leg. Sounds insane, I know. You should have seen the look on my face when he called me about it.
The next big question is how to choose the insurance company. This depends on the coverage you're looking for. There is one truly important issue here (regardless of other issues) and that is the matter of choosing the supplier's insurance (i.e.- the cruise line's/tour operator's coverage) or a third party insurance (such as Access America or Travel Guard). Remember, the supplier's insurance will not cover you if the supplier defaults! In other words, if your cruise line or tour operator went bankrupt and defaulted their insurance would not cover you. Most travel agencies offer third party insurance and realistically speaking it's a small amount to pay for the security it gives. It is comparable in price, and in many instances can be less than the supplier's coverage.
While you may or may not remember the demise of Regency Cruises a few years back, where passengers were essentially offloaded at whatever port the ship arrived at and the vessels were confiscated, but I'm certain you have read of the recent closing of Premier Cruises. In both those cases, many third-party insurers sent blanket faxes to travel agents stating that the agents' clients who purchased insurance from their company were covered. Others who took the supplier's insurance or had no insurance have to try to recover their money from the various legal venues. Remember travel suppliers, like any other business, sometimes close their doors and often without any sort of warning.
If you do opt for the supplier's coverage, check what exactly is covered. Some coverages do not allow you to cancel right up until departure. Other coverages may merely be a "cancellation waiver" and not insurance at all. All this means is you can cancel (within set limitations), but if your trip is interrupted for some unforeseen reason you're not covered. A good travel agent can go over all of the options with you as well as compare costs.
Another thing to consider is that while you may think that charging your trip to your credit card covers you with your credit card's chargeback policies, even that coverage is limited. While it may cover supplier default (with many limitations) it won't cover you if you are the one that cancels. Nor will it cover you if you have to end your vacation early. Also keep in mind many card companies have date restrictions on chargebacks and most vacation packages are paid well in advance.
Travel insurance coverage varies from company to company and policy to policy. Most of the third party insurance companies have a toll-free number you can call with specific questions regarding coverages. Also, many third party insurers will cover pre-existing conditions if you meet their specific criteria (usually purchasing the coverage at or near time of deposit on your vacation). A good thing to know in advance.
In the end it boils down to this. Definitely get travel insurance, preferably a third party insurance like Access America or Travel Guard, and make sure you fully understand the policy and it's limitations before you purchase the coverage.
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Epinions.com ID:
Diana_Jordan
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Member: Diana Jordan
Location: New York, NY
Reviews written: 16
Trusted by: 24 members
About Me:
+10 years in the industry. Listed in TravelAgent Magazine's Top 100 Rising Stars in 1999.
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