Hedging Your Bets

November, 2001

Ever since the dreaded day of terror when international terrorists used commercial airlines as fully fueled missiles against our own country, more and more travelers have been purchasing travel insurance policies. “We are seeing sales volume increases of 30 to 40 percent,” says Jim Grace, president and chief executive officer of New York-based InsureMyTrip.com, the largest comparison travel insurance site on the Internet.

But customers are encouraged to read the fine print, because as most people currently filing claims are finding out, not all policies include terrorism coverage. Aline Steiner, European destination specialist for Regal Travel’s Kahala Branch, says even though a lot of people are trying to make claims on their insurance policies because they simply don’t want to travel anymore, most of those claims are being denied. “The travel insurance company we work with (CSA Travel Protection) will not cover acts of terrorism or war inside the U.S.,” she says. “And the majority of travel insurance companies nationwide don’t cover it either.”

Unlike InsureMyTrip.com, Steiner says Regal Travel hasn’t seen an increase in sales of travel insurance policies. “Unfortunately we’ve been having more cancellations than sales all in all,” she says.

According to Travel Agent magazine, approximately 25 percent of the American traveling public purchases travel insurance, a figure industry experts expect will likely increase following the attacks on the East Coast. With policies ranging from $10 to upwards of $5,000 in premiums and averaging around $200 per trip — depending on the trip length and policy type — it’s no wonder most travelers don’t give travel insurance a second thought.

However there is a great array of policies available, so if possible, opt to tailor your coverage to your specific requirements. Coverage is designed to accommodate every possible need, including injuries, death, trip cancellation, lost or delayed luggage, and medical emergencies, among others. The most popular, according to San Diego-based CSA Travel Protection, is trip cancellation/interruption coverage, comprising around 80 percent of the company’s sales.Unfortunately, it takes incidents like the World Trade Center and Pentagon attacks to open the eyes of jaded passengers. “Many feel it is not necessary until they get into a jam, and then it’s too late,” says Grace. “It is a very important consideration when traveling, and these policies do pay real benefits should you get into trouble or have to cancel your trip.” Grace says it is especially important if you are paying in advance for a tour, airfare, cruise, hotel or even a rental house, to consider signing up for a travel insurance policy before you go.

Most cancellation/interruption coverage includes medical services, however travel insurance agents often urge travelers to pick up additional coverage. “Most regular medical insurers (including Medicare) will not cover you outside of the U.S., and sometimes even outside of your home coverage area,” says Steiner. In addition to medical coverage, travel insurance provides many other benefits that life, car, or credit card insurance probably won’t cover on a trip.

According to the U.S. Department of Transportation, the average traveler spends four months planning a trip, but just 30 minutes researching travel insurance, if that. Most travel agents won’t remind you, but be sure to do your homework. Before you decide whether to purchase travel insurance, find out what all of your existing policies cover. Relatively few companies offer protection worldwide, while some will care for you only in your home state or for travel within the country.

Once all of those options have been carefully studied, head on over to a local travel agent or visit the Web for a comprehensive comparison of policy coverage and pricing.

After all, a smart traveler is a well-informed traveler.

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