Your Travel Rights: Travel Insurance 101
by John Hawks

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In plain English, what is travel insurance? It’s a separate insurance policy -- bundled automatically into their cruise or tour package, or purchased independently -- covering the specific risks of a client’s trip.

Who should buy travel insurance? Again, it’s a simple answer. If your clients could not absorb the financial losses if their trip were canceled completely (or if they became seriously ill or injured on the trip), they need travel insurance.

What are the most common types of travel insurance? Many travelers know about “trip cancellation/interruption/delay” coverage, which protects them if they encounter problems on the road (e.g., a canceled airline connection) or if the trip never happens at all (e.g., an unexpected illness in the family). Other common coverages include baggage delay/loss/theft, medical or dental benefits for on-the-road mishaps, and emergency medical evacuation (returning you home if you’re hurt during the trip).

What will travel insurance cost? A good rule of thumb used by many consumer advocates is 5 percent of the total trip cost for the basic types of coverage. Of course, your clients could easily pay much more if they add a lot of different options to their basic policies.

What questions should your clients ask about travel insurance? Remind your clients to consider these issues when they choose their coverage through you:

1. Does the policy offer a full refund of trip costs in the event of a cancellation?

2. Does the policy apply if a travel supplier (e.g., the cruise line, the tour operator) declares bankruptcy or becomes insolvent?

3. When does the policy go into effect? (Sometimes, for example, your clients may not be covered until their flights depart, meaning they won’t be protected if they have an accident on the way to the airport.)

4. What exclusions are contained within the policy? For example, will it cover your clients if they’re injured while parasailing on their honeymoon trip in the Caribbean (or, is parasailing excluded as an activity that’s too risky for travelers)?

5. Does the policy truly offer “emergency medical evacuation” (i.e., a return home to North America), or does it simply pay for transportation to the “nearest appropriate medical facility” (i.e., the nearest hospital in the destination)?

6. Is the policy underwritten by a supplier directly (e.g., a cruise line), or is it provided instead by a “third-party insurer” (i.e., a travel insurance company)? The distinction matters greatly, because supplier-underwritten coverage disappears if the supplier behind the policy goes out of business or declares bankruptcy! It’s always safer to work with third-party travel insurers.

Want more information about OSSN’s special travel insurance programs? Check this page on OSSN’s site! (You must sign in as an OSSN member to view the information.)

(In March, we’ll explore the dos and don’ts of using credit cards when you travel. Have any tips to share? Send them to us!)

(Photo credits: TravelSafe; AFS Stock)