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It can't make your plane arrive on time, but a travel insurance policy can spare you from losing money if you suddenly fall ill, are called to jury duty or face a similar last-minute mishap.
The cost of travel insurance doesn't make sense for every trip. As a rule, consider insuring only large, nonrefundable trips -- such as cruises and vacation packages -- for which expenses are paid more than a month before departure. Supplemental medical insurance coverage is not justified for most trips.
Policies generally sell for up to 8% of your trip's cost. Prices will vary depending on your age and the coverage offered. Travel Guard, the largest travel insurer, for instance, recently charged $145 (with no extra fees), or 5% of the trip cost, for a trip-cancellation policy called ProtectAssist covering up to $3,000 of trip expenses for a 45-year-old person traveling in Western Europe. You can find other insurers at InsureMyTrip.com.
Some trips can't be insured, so be sure to check the name of your travel company with your potential insurer. Travel Guard and another leading insurer, Access America, for example, will not cover airfare for US Airways flights because of the airline's financial troubles.
Consider travel insurance policies that protect you from the most frequent causes of financial loss: trip cancellation and emergency air evacuation.
Trip Cancellation
Cancellation policies reimburse you if you cancel a trip for covered reasons, which usually include illness, jury duty, a fire in your home or a similar misfortune.
Without such insurance, you will lose your money if you cancel some vacation packages within seven days of departure. A similar rule holds true for most cruise tickets.
There are three typical exceptions to trip cancellation insurance. First, travelers who are under treatment for a medical condition at the time they buy trip cancellation insurance may be excluded from compensation for any illnesses related to that medical condition. Travelers under medical treatment should ask if the policy covers them. Travel Guard's ProtectAssist covers medical conditions if a policy is purchased within 15 days of making the first deposit on a trip or cruise and you are well enough to travel when you buy the policy.
Last-minute difficulties that cause you to miss a flight or a cruise are not covered under all trip cancellation policies. If you are sidelined in the last 48 hour or so before departure on a vacation package, say, a trip cancellation policy may not refund money.
The ProtectAssist policy from TravelGuard, for example, does not include coverage if you are delayed because of a traffic accident on your way to departure or face another eleventh-hour snafu. The company's Cruise Tour and Travel policy does cover these perils, however. It costs $220, or $75 more than the ProtectAssist policy.
Access America offers a policy that covers the insured or their traveling companion if he or she is directly involved in a car accident en route to departure. For $126 and a $5 fee, the policy, called Travel With Ease, would cover $3,000 of travel expenses for a 45-year-old.
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