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Travel insurance is popular, coverage not so much
Call it hedging a bet, playing it safe or now just part of the deal, more people are buying travel insurance than ever before, and they have some good reasons. Earthquakes, floods, ash clouds, civil and political unrest along with snowstorms, fear of pirates and scary things that go bump in the night all seem to play into making what was commonly a "no" decision a "yes, absolutely" when it comes to buying travel insurance. Buying travel insurance is popular but coverage varies and knowing the details of your policy is important.
"2010 certainly raised people's awareness of the value of travel insurance," Dean Sivley, chief executive of the travel insurance company Travel Guard told the New York Times. "Yes, more people are booking travel insurance. But yes, we also paid out more claims in 2010 than would be typical. Hopefully, we won't have a lot more years like 2010."
In the past, travel agents hated to mention the topic of travel insurance, viewed as an unnecessary expense or a way for them to "run up the bill." Now, travel insurance is commonly added automatically if for no other reason than to save time down the line as few have it removed.
But having travel insurance and being covered are two entirely different matters it seems. Many of the feared reasons for cancellations are not covered as some find out the hard way.
"Many people assume that their cheap travel insurance will cover them against every eventuality, but this isn't the case." says Patrick Chong Managing Director of Journey's Travel who operates a commercial travel insurance website, Insuremore in the UK. "There are plenty of exclusions in the average document, and one of the most well known but least understood of these is the "acts of God" exclusion."
Acts of God include Hurricanes and tempests, Lightning storms, Floods, Earthquakes and volcanic eruptions. Those may or may not be covered but what about civil unrest, political and terrorism events that disrupt travel ?
"While acts of God is one of the most well known exclusion clauses, in today's international climate, terrorism is also a common exclusion. Much like natural disasters, if you incur costs or your holiday is canceled because of terrorism, your travel insurance may well be invalid. If terrorism is a potential hazard for your destination of choice, check that your worldwide travel insurance will cover you against acts of terrorism - some insurers do provide this kind of protection, but many do not."
So it's buyer beware when it comes to travel insurance and just having it should not give travelers the confidence that they are covered in all situations. Check with a travel insurance agent and ask specific "What if?" questions, In the U.S. most states require those agents to be licensed. Be sure yours is.
Best bet: Call the travel insurance company directly to check coverage and deal with a firm that is highly rated. TravelInsuranceReview.net provides editorial reviews, customer reviews, guides, and articles that help you decide which travel insurance to buy for your trip.
But having travel insurance and being covered are two entirely different matters it seems. Many of the feared reasons for cancellations are not covered as some find out the hard way.
"Many people assume that their cheap travel insurance will cover them against every eventuality, but this isn't the case." says Patrick Chong Managing Director of Journey's Travel who operates a commercial travel insurance website, Insuremore in the UK. "There are plenty of exclusions in the average document, and one of the most well known but least understood of these is the "acts of God" exclusion."
Acts of God include Hurricanes and tempests, Lightning storms, Floods, Earthquakes and volcanic eruptions. Those may or may not be covered but what about civil unrest, political and terrorism events that disrupt travel ?
"While acts of God is one of the most well known exclusion clauses, in today's international climate, terrorism is also a common exclusion. Much like natural disasters, if you incur costs or your holiday is canceled because of terrorism, your travel insurance may well be invalid. If terrorism is a potential hazard for your destination of choice, check that your worldwide travel insurance will cover you against acts of terrorism - some insurers do provide this kind of protection, but many do not."
So it's buyer beware when it comes to travel insurance and just having it should not give travelers the confidence that they are covered in all situations. Check with a travel insurance agent and ask specific "What if?" questions, In the U.S. most states require those agents to be licensed. Be sure yours is.
Best bet: Call the travel insurance company directly to check coverage and deal with a firm that is highly rated. TravelInsuranceReview.net provides editorial reviews, customer reviews, guides, and articles that help you decide which travel insurance to buy for your trip.
Flickr photo by Andrew Steinmetz
Filed under: Europe, North America, United Kingdom, United States, Travel Security
Reader Comments (Page 1 of 1)
Megan, blogger Apr 3rd 2011 12:42PM
I have been traveling for many years with my family, and my father was always (and still is) adamant about travel insurance. He checks all the fine print and constantly researches travel agencies to make sure he will be covered! And in this economic recession, it is so important to make sure your bases are covered and money doesn't run through your fingers.
Are there some "traps" that travel agencies try and rope their customers into? Are there specific questions we should be asking?
Damian Apr 3rd 2011 1:08PM
Though it si true that many travelers buy insurance and think that 'everything' will be covered, the 'Acts of God' exclusions mentioned in this article are not necessarily in all plans. Most US-based travel insurance companies that provide trip cancellation coverage list hurricanes, earthquakes, and other natural disasters as 'covered reasons' for cancellation. The important stipulation here is that the disaster directly affected your destination, that that is 'came close' or might affect your destination.
The safest way to have total, 'covered no matter what' coverage is to purchase a 'Cancel for Any Reason' travel insurance plan. These plans reimburse a large portion of your pre-paid, non-refundable trip costs as long as you buy it soon after planning your trip, and you cancel more than 48 hours before your trip.
Charles Apr 3rd 2011 9:09PM
I am one who always buys Travel Insurance with a "Cancel for any Reason" clause. Business difficulties (both mine and the Travel Supplier) Health, Family, etc. just make it a good idea.
However, I hate the fact that other parts of the world have Travel Insurance on Annual Policies. I have been unable to find anything in the US that is close to similar. I travel usually 3-6 times a year. It would be really convenient to be able to purchase a policy that would cover me and the wife for an entire year. I have friends in the UK, Australia, and Canada that are able to purchase annual Policies for travel costing about $400US. Since when I buy here in the States, I usually pay about $100-$175 per trip, an Annual Policy for $400 sounds like a reasonable expense.
When is the Travel Insurance Business going to bring the US into the modern world???
myvacation Apr 4th 2011 9:58AM
You have discussed general truth here.
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