Insurance

New York Times February 4, 2006

Planning a Trip With Peace of Mind in Mind By ALINA TUGEND

WHEN planning a vacation, I think of sun, sea, great dinners and fascinating sights.

Call me crazy, but the last thing I want to think about is the possibility of death, dismemberment, sickness, terrorism or natural disasters.

But now, suddenly, I am. The whole family is going to Costa Rica next summer and we're trying to decide if we need trip insurance.

We had it before, when we lived in England — where, as in most European countries, it's very common — and it was provided through my husband's work. We used it several times, once when we had to cancel a vacation at the last minute and once when we had to cut short a trip because of illness.

When we moved back to the States, we no longer had such coverage and I did not give it much thought. But now, with thousands of dollars invested in an overseas trip, I'm beginning to worry.

I'm not alone. Since the Sept. 11 terrorist attacks, the number of travelers buying trip insurance has risen to about 30 percent from 10 percent, according to the United States Travel Insurance Association www.ustravelinsurance.org, a trade group for travel insurance companies.

Generally speaking, there are several sources of travel insurance, including the following:

If you booked your trip through an agent, she can provide insurance, usually through one of the major travel insurance companies. The upside of using an agent, who receives a commission for selling travel insurance, is that she knows your trip and your needs. The downside is that she may be pushing one company that is not necessarily the best fit for you.

If you do not want to go through an agent, you can buy directly from travel insurance companies. The www.insuremytrip.com provides a good overview and comparisons of the companies available. You can also call toll-free: 1-800-487-4722.

Travel suppliers — that is, airlines, cruise lines and tour operators — usually offer travel insurance, but it may not be as comprehensive as the policies offered by travel insurance companies.

Before deciding where to buy the insurance, however, I had to figure out what I needed.

The primary reason people buy travel insurance is to avoid losing a lot of money if they have to cancel or interrupt a trip.

According to Jonathan Ansell, president of the United States Travel Insurance Association, most comprehensive travel insurance packages cover about 20 of the most common reasons people call off their trips: someone in the immediate family becomes sick; a family member who is not traveling becomes ill or dies; a family member becomes ill or dies while the traveler is away, and that person needs to return home quickly; natural disasters and terrorism.

These packages will provide terrorism coverage only if the attack happens in the city or country the traveler is going to; each company has its own definition of terrorism. A policy will not pay off just because a policyholder wants to cancel or curtail a trip out of general concerns about a terrorist act that occurred or is threatened somewhere in the world.

"We get that question all the time," said Peter J. Evans, executive vice president of insuremytrip.com. "Homeland Security moves up a color and people become very concerned and they want to cancel their trip, but insurers don't look at it like that."

Careful reading of policies is a must, specialists say. For example, even though most policies may say they cover hurricanes, not all coverage is equal, said Mari McQueen, a senior editor for Consumer Reports. Say you're traveling to an area hit by a hurricane. If flights have resumed to the location, a policy might not reimburse you, even if all the resorts are flattened, Ms. McQueen said.

Relatively new coverage will pay if your destination is uninhabitable, she said.

It is also important to buy the insurance soon after booking, Ms. McQueen noted. You can't buy travel cancellation coverage, in many cases, once the National Weather Service has identified a hurricane affecting the area you're going to.

Some companies, responding to consumers who want the greatest flexibility possible, are offering policies called "Cancel for Any Reason." They're more expensive, Mr. Evans said; travelers receive most, but not all, of their money back. Travel Safe Insurance offers this coverage www.travelsafe.com.

Most comprehensive packages — which cover trip cancellation, medical problems and property losses like lost or stolen baggage — run from 4 to 8 percent of the cost of an entire trip, depending on the age of the traveler, the amount of coverage desired and the cost and length of the journey.

For example, on a trip that costs $3,501 to $4,000 — for flights, hotels, and everything else — AccessAmerica www.accessamerica.com, one of the largest travel insurance companies, charges $153 for a traveler up to age 30. One more than 81 years old, however, would have to pay $530.

Before buying any travel insurance, though, it's important to find out what your credit card, health insurance and homeowner's insurance offer. You may have some coverage you don't know about.

Since medical care is a big reason people buy travel insurance, I checked on our health coverage. It turns out to be fairly good overseas, including paying for emergency room visits and hospital stays. After receiving contradictory answers from my medical insurance provider, I've determined that it will not pay for an air ambulance if, say, one of us needed to be airlifted back to the States.

Air ambulance service can cost $15,000 and up, and it's essential to know if you're covered, especially if you are traveling to a country where the health care may be iffy, Mr. Ansell said.

Our MasterCard, I discovered, will provide some limited services, including helping cover lost or stolen baggage or a burglary in our hotel room, but it does not cover trip cancellation or any type of medical evacuation www.mastercard.com.

American Express, www.americanexpress.com, offers a wider variety of services to its cardholders, depending on the type of card; some are free to cardholders and some are available for a fee.

Consumer advocates, who traditionally have been skeptical of trip insurance, say while it is probably not necessary on shorter trips, it is a good idea on expensive multi-leg expeditions.

Even for smaller claims, it's important to know what you're buying. Dan Reineman, 24, found that out when he insured a 35-day surfing trip to Indonesia. On his first day of surfing, his new $743 surfboard broke.

When Mr. Reineman returned home to Hawaii, he called the travel insurance company, which sent him a claim form. To be reimbursed, he found out, he needed to have reported the loss to a tour guide or representative and to have obtained a written report.

Mr. Reineman still plans to go ahead with the claim, but he is not optimistic.

"I guess I should have read that fine print," he said.

This research effort so overwhelmed me that I was ready to forgo trip insurance and take my chances. An unscientific survey of friends showed that virtually none buy travel insurance, usually because they don't think they need it or they don't feel like figuring out all the options.

But are we living in a fantasy world?

"I don't like to sell anything without insurance," said Iris Malik-Ferrelli, an agent with Bayside Travel in Larchmont, N.Y. Ms. Malik-Ferrelli said about 80 percent of her clients agreed to take insurance, but her primary goal was to make sure that people were aware that it was available.

She's satisfied, she said, "as long as I know I presented my case."

"When a trip goes great, you don't need it. But when things go bad, people become animals when money is involved."