Travel Insurance

The demand for travel insurance has more than doubled since recent terrorist attacks. But a comprehensive travel insurance policy can add another four to six percent to the cost of your trip, so it pays to do your homework before you buy.

Available Types of Travel Insurance

You can purchase many kinds of travel insurance, including:

• Trip interruption and cancellation insurance, which covers your expenses if you can't go on or finish your planned trip due to illness or unexpected circumstances
• Flight and cruise coverage
• Rental car damage
• Emergency medical costs in a foreign country

Check Your Existing Policies First

It's possible that some of the events you want to insure against are already covered by existing insurance. For example:

• Your auto insurance may cover you and your family members driving rental cars for short periods of time
• Your life insurance probably covers death in an airline crash or cruise boat accident
• Your health insurance may cover at least a portion of the costs of injuries in foreign countries
• Your homeowner's or renter's insurance probably covers the cost of lost luggage and personal belongings

Many airlines have become more lenient with their cancellation policies, allowing you to change your destination or dates without additional cost. So it's a good idea to check with your airline before paying for unnecessary insurance.

It's also possible that paying for a rental car with your credit card may make you eligible for limited rental car coverage through your rental car company.

What To Watch Out For

Don't expect your travel insurance policy to cover:

• Terrorist attacks, unless you want to pay enormous coverage costs
• Contagious disease outbreaks such as SARS
• "Pre-existing health conditions" such as chronic illnesses or reoccurrences of old injuries
• Injuries from "extreme" sports, such as sky-diving or bungee-jumping

In comparing travel insurance policies, you'll want to ask if a particular policy covers:

• An airline declaring bankruptcy
• "Supplier default" if the company you book a tour with goes out of business
• Alternative travel costs, if you need to book different flights or other transportation home due to illness or catastrophe
• Emergency evacuation costs, if you're planning to visit remote areas
• Tropical weather conditions such as hurricanes, floods and typhoons (usually excluded by insurance companies as "acts of God")
• Fires and earthquakes
• Car accidents
• Just you, or other family members or planned traveling companions
• Reimbursement of prepaid trip expenses, such as nonrefundable deposits on cruises or tours

It's also important to find out whether the plan has deductibles, or only covers medical expenses for certain preferred provider physicians and hospitals.

It's a delicate balance to weigh the cost of protection against the likelihood that a specific problem will strike during your particular trip.

Buying appropriate travel insurance before your holiday starts will hopefully make your vacation less stressful and more enjoyable. Now if you could just do something about the long lines at the airport.