| Before
sailing off on a cruise or testing your mettle on
a hiking tour of the Himalayan mountains, make
sure you have adequate insurance. Vacations can
sometimes cost thousands of dollars so it is
important to have the proper insurance protection
in case the cruise or tour operator goes bankrupt
or you need to cancel the trip due to sickness or
other disaster. There are
four major types of travel insurance--
1.
Trip Cancellation Insurance
This
would reimburse you if the cruise line or tour
operator goes out of business. It would also
provide coverage if you have to cancel the trip
due to sickness, a death in the family or other
calamity listed in the policy.
In
addition, if you or an immediate family member
becomes seriously ill or injured during the trip
most policies would reimburse you for the unused
portion of the vacation.
The
cost is generally 5% to 7% of the price of the
vacation, so a $5,000 trip would cost roughly
$250 to $350 to insure.
Trip
cancellation is very different from a
cancellation waiver that many cruise and tour
operators offer. Waivers are relatively
inexpensive, costing approximately $40 to $60.
They provide coverage if you have to cancel the
trip, but they have many restrictions. They must
be purchased when you book the trip and they will
usually not cover you immediately before
departure (the time period most people cancel) or
after the trip has begun. Most importantly,
waivers are not insurance. Cancellation waivers
are not regulated by the state department of
insurance, so if your tour or cruise operator
gets into financial difficulty you may not be
able to collect unless you have purchased trip
cancellation insurance.
2.
Baggage Insurance or Personal Effects Coverage
This
would provide coverage if your personal
belongings are lost, stolen or damaged during the
trip.
To
insure $1,000 worth of personal belongings for a
week, it would cost roughly $50.
Before
purchasing this type of coverage, find out how
much insurance the airline or trip operator
provides for your belongings.
Also,
check your homeowners or renters policy. It will
usually provide coverage for off-premises theft.
Therefore, if your luggage is stolen, your
insurer will pay to replace it less the
deductible.
If
you are traveling with expensive electronic
equipment, jewelry or sporting gear, it might be
more cost-effective to purchase a floater or
endorsement to your homeowners or renters policy.
The cost to insure a $1,000 ring would be between
$10 to $40. This would provide full coverage for
the item, anywhere in the world, usually for one
year.
3.
Emergency Medical Assistance
This
provides insurance and medical assistance for
travelers. It would cover you if you had to be
airlifted off a mountain due to a skiing or
hiking accident or had to stay for a prolonged
period of time in a foreign hospital. It would
also provide coverage if you got seriously sick
or injured and needed to be flown home. Some
commercial airlines require very sick passengers
to travel on a stretcher with a doctor. This
means that you might have to purchase 10 or more
seats on a plane at a possible cost of over
$10,000.
Before
purchasing this type of coverage, check with your
own health insurance carrier. Find out what type
of coverage you have when traveling abroad and if
there are any limits. Also, ask if they will pay
to fly you home or to a country with first-rate
medical care.
4.
Accidental Death
This
would provide a variety of coverages if you or a
family member dies on the trip.
Generally,
if you have a good life insurance plan or made
other financial provisions for your loved ones,
this may be duplicate coverage.
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