Here's a copy of Peter's tips on trip cancellation insurance, presented at the March, 2006 meeting of the Travel Club:
N.B. None of the information given below is a substitute for careful review, and understanding, of any insurance contract. If you are uncertain of any of the provisions of the contract, phone the offering company for an explanation, and take notes.
1. Who would benefit from Trip Cancellation/Interruption Insurance?
• Travelers who are planning guided tours or cruises, which involve large up-front payments, have the most to protect, and hence should have the most interest in this type of insurance.
• However, even independent travelers should consider trip cancellation insurance, if they have significant advance payments for transportation or accommodation, and are not eleigible for full or substantial refunds in the event of unforseen events leading to cancellation before departure, or interruption of a trip in progress.
• Older travelers and travelers with aged or infirm family members are strongly advised to take out this coverage.
2. Covered Risks
• Medical reasons, such as: illness, accident or death of you, a member of your immediate family, or a traveling companion, which result in the need to cancel or interrupt your trip, are covered. (Note however, the possible exclusion related to pre-existing medical conditions, below.)
• Unforeseen misadventures, such as: your house burns down or is flooded; you are called to jury duty and cannot get a deferral; you have an automobile accident or flat tire on the way to the airport and miss your flight, and similar unforeseen misadventures are covered.
• Disasters at one of your destinations, such as: earthquake, flood, fire, strike, and epidemic at one or more of the places on your route, which cause trip cancellation, are covered. (Note however, certain exclusions in this category, below.)
3. Exclusions
• Failure of insurance company from which you buy your insurance is, by definition, not covered.
• Failure of tour operator usually not covered. (However, if you have paid by credit card, and the tour operator does not provide the service you paid for, you may be able to cancel the charge. It's always wise to pay by credit card, if possible, even if the tour operator gives a small discount for payment by check.)
• Terrorism, war, and nuclear explosion are not usually covered. (In case of nuclear explosion, the need to cancel your trip is probably the least of your concerns.)
• Cancellation resulting from pre-existing medical conditions may not be covered. It's important to read the fine print here. Often the insurance carrier will waive the pre-existing condition exclusion if a) you have not received treatment for pre-existing condition(s) for a certain length of time before departure, and/or b) if you buy your insurance coverage within a limited time (such as 14 days) of making your first payment of travel expenses (such as a deposit to a tour company).
• The importance of reading the contract carefully, particularly the fine print, cannot be overemphasized.
4. Payouts
• Cancellation: If you make a claim, the maximum payout is limited to non-refundable expenses (i.e., the difference between what you paid and what you can get refunded).
• Interruption: If your trip is interrupted, the insurance company will pay the additional costs (less any refunds) of rejoining the tour, or resuming your travel, and any airline penalties from rescheduling your flight(s). If you have to travel home mid-trip, the cost of a commercial airline ticket home will be paid. If you require to be medevac'ed by air ambulance, that cost is very high and is not covered (see Derek Stables's Travel Skills presentation in the archive, "Emergency Medical Evacuation Insurance").
5. Cost
Varies; up to 5 percent of your trip cost, depending on details of coverage.
6. Don't Overinsure
• Check refund policies of tour operator. You need coverage only of the non-refundable portion. (Note, however, that once you depart on an organized tour or cruise, there is usually no refundable portion.
• Check insurance coverages you already have. Your credit cards may provide travel accidental death/dismemberment coverage, loss of baggage, or theft of items during your travel, provided of course you paid for your travel with the credit card concerned!! This coverage is only very partial at best.
7. Insurance Companies
• There are many companies offering this type of coverage. For a comparison of many of the offerings go to:
www.insuremytrip.com
a very helpful site that helps you sort out the various offerings.
Three examples of companies offering policies are:
• Travel Guard: 1-800-826-4919, www.travelguard.com/
• CSA Travel Protection: 1-800-348-9505, www.csatravelprotection.com
• Travel Insurance Services: 1-800-937-1387, www.travelinsure.com
I have used Travel Guard, and found them to be very satisfactory (though I have not had to make a claim).
*Included in this type of insurance is "Trip Interruption Insurance" which covers temporary or permanent interruption of a trip in progress.
