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Insuring Your Vacation? Make Sure You're
Actually Covered
High energy costs, a tough economy, you name it — there's
still plenty of travel delays and headaches in the skies and on
the ground. Those delays can potentially cost a lot of money,
which is why it's a good idea to carry travel insurance on
expensive trips to cover missed connections that can delay your
arrival for a day or more. The same goes for lost baggage or
sudden medical expenses in different regions of the U.S. or
other parts of the world.
But take a moment before you rush out to buy a Cadillac
policy for your two-week trip to Hawaii. Travel insurance, like
any coverage, should be tailored to your specific needs. You'll
see it sold as a one-size-fits-all product, but that's not how
you should buy it. Here are some pointers:
Call your HR department or health insurer. Yes, you
might be out hundreds or perhaps thousands if you can't get to
your destination, but that's not the biggest potential money
risk on any trip. What if your health benefits won't cross state
lines, much less international borders? As you're planning your
trip, check to see if your personal health coverage for you and
family members will be effective at your destination. If the
answer is no, see whether your credit card company offers health
care coverage there and if so, what it costs and what it
entails. The next step is purchasing specific travel health
insurance that will be accepted at your destination, which may
be sold in a package with other coverage we'll mention
momentarily. Also, it might make sense to make an action plan
for a health emergency. Call the concierge at your destination
to get information on the best nearby hospitals and clinics so
you can check if your coverage applies, and see what ground or
air transport options exist to get you to the best hospital.
Transport can be costly if you're in a remote location.
Start at least a month in advance. Most people make
major trip reservations fairly far in advance to get the best
fares and hotel rates, and you'll need to do the same for travel
insurance. You'll find that carriers are particularly picky
about pre-existing conditions for medical or dental treatments,
so read the fine print.
There's no such thing as full coverage — unless you're
willing to pay for it. What's full coverage? That's a good
question, and it sometimes depends on dozens of factors unique
to your trip. Your carrier might not offer protection on your
chosen airline or cruise line. You'll find that terrorism
insurance is rare and complicated. And you have to examine
medical insurance options closely to understand exactly what is
covered. The rare soup-to-nuts coverage — covering trip
cancellations, lost luggage, delays that leave you stranded,
flight accident, emergency medical and medical evacuations — is
typically priced in the hundreds of dollars and may cover
only up to 75 percent of the total cost of your trip.
Make sure your insurance covers missed connections.
Cancellation insurance doesn't cover everything. Investigate
whether a missed connection — and the resulting meals, overnight
hotel bills and taxi or train transportation you'll need if
you're stuck overnight in a strange city — is covered.
Start online. Go to some of the leading websites that
deal in single or multiple-insurer offerings. InsureMyTrip.com
is a market leader and a good first stop in analyzing coverage —
you start by punching in the necessary information on your trip
(dates, age of travelers, medical coverage needed, etc.) and it
spits back more than a dozen possibilities at all price levels.
Clicking on any of the choices will give you a detailed view of
what those policies will and won't cover.
Ask about hurricane coverage. The 2008 Atlantic
hurricane season began June 1 and will run through the end of
November. Even if you don't live in a hurricane area, hurricanes
can disrupt the flow of air travel all over the country. Ask
whether your travel insurance has hurricane coverage — or other
weather-related coverage — and what you'll need to file a
claim.
Fight ATM fees — before you leave. It's not
guaranteed, but your bank might agree to waive any fees you
incur at overseas ATMs if you ask in advance. Call them and
check.
Watch that cell phone. Increasingly, domestic cellular phones
are working in more areas of the world. That's the good news.
The bad news is whether you'll be charged extra fees for using
your phone in those areas. Check before you leave.
Marooned? Ask for a break. If you're sidetracked as
the result of a major disaster (weather-related or otherwise),
always ask if your airline, hotel or other components of your
vacation might be willing to give you a credit or discount on
your bill. It's rare, but some destinations might see it as a
chance to build goodwill so you'll be a repeat customer. The
worst thing they can do is say no.
July 2008 — This column is produced by the Financial
Planning Association, the membership organization for the
financial planning community, and is provided by Don McCarty of
Financial Decision Partners, a local member of the FPA.
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