Travel Insurance Tips & Sources

The burgeoning travel insurance business booked $1.6 billion last year. While once a small industry with limited coverage options, it now offers up a plethora of insurance menu items from à la carte to carte blanche.

Over the past 10 years, the industry has evolved and diversified, and thereby grown considerably. The US Travel Insurance Association quotes a 13 percent surge in business in the last two years alone.

“Back in 2001 the industry was probably $500 or $600 million in size,” says Peter Evans, executive vice president of online travel insurance retailer InsureMyTrip.com. “The industry has had triple-digit growth in the span of eight years, and along the way you’ve seen the companies continue to innovate.” T&L

The September 11 attacks marked a millstone in the travel insurance business when travelers were stranded across the world with all US flights were grounded. Travel & Leisure quotes Nancy Cutter, president of Court Travel in Charlotte, N.C., “We had people stuck in Europe when all U.S. flights were grounded. Insurers looked at that and decided to make sure people were covered for out-of-pocket expenses. So a lot of the per diems increased, and they lengthened the time you could claim them if you got delayed.”

Weather was once an across-the-board exclusion under travel policies, but Hurricane Katrina and the rash of other hurricanes from 2002 to 2005 caused insurers to reconsider their position. Now you can get coverage that insures for a habitable destination devastated by weather.

Coverage for H1N1 is the latest wave. “There are a number of carriers that, up until last year, excluded pandemics,” Evans says, “but now you see some of those carriers provide coverage for that.”

Access America recently expanded its “cancel for any reason” plan, originally launched in 2008, to offer 100 percent coverage in case of job loss to the travel supplier going out of business.

Coverage for medical emergencies and medical evacuation has been insurable for years. Coverage that will get you to a good hospital if you fall ill or get injured on a vacation, particularly in a foreign country, could save your life.

Various plans may cost between four and eight percent of the cost of a trip.

Here are some pointers from the experts for travelers considering an insurance plan:

• Make sure you know about coverage you might already have before you buy a plan,

• Gather as much documentation as possible when filing a claim,

• Buy a plan when you book (in order to dodge huge exclusions).

Travel agents can be good resources for discussing the pros and cons of various plans. Also, USTIA.org posts a list of travel insurance companies in good standing in terms of business and ethical standards.

Travel insurance is not perfect but if you book a trip with stiff cancellation penalties, it could save you lots and lots of money and angst when circumstances force you to miss the trip of your life.