Travel insurance insight

Determine whether you need coverage on your next trip

You’re traveling to the Far East for two weeks, spending a few thousand dollars. The trip should be splendid — unless your plans come to a screeching halt due to a sudden illness or some other emergency. If you were smart enough to purchase travel insurance, your plans might be ruined but at least you’d be able to avoid a financial disaster. Otherwise, call in the Coast Guard, because your wallet is going to start sinking fast.

Although travel insurance is not a necessity for most domestic trips, it’s not a bad idea for expensive and/ or long overseas jaunts. The coverage can protect you if you have to cancel your trip at the last moment, says Anne Leonard, staff writer for InsideFlyer, a publication for frequent fliers. Travel insurance can also help you contain some unexpected medical expenses and perhaps the costs associated with an emergency trip back home.

But when you need travel insurance, what type should you buy? “Before spending any extra money, check your current policies,” advises Leonard. Your health insurance plan may already pay for an emergency while you’re overseas, although it probably won’t cover your emergency transportation back home. Also, examine your home and life insurance policies. They may cover various travel misfortunes, such as illnesses and accidents. “And if you rent a car on your trip and use a credit card, you may be already covered by your credit card company,” notes Leonard. Find out how much coverage you receive and if there are any restrictions. But beware that in case of a car accident, you may be asked to pay for damages up-front and have the credit card company reimburse you.

Finding the right travel insurance will take some research, says Leonard. Keep in mind that policies typically cover as much as $10,000 in medical expenses and $20,000 to $50,000 in evacuation costs. Preexisting conditions and risky activities (such as mountain climbing or bungee jumping) won’t be covered.

There are three types of travel policies: bundled, custom, and flexible. Health and evacuation policies are often sold in combination with trip cancellation, baggage loss, and accidental death insurance. Bundled packages like this typically cost from 6% to 8% of the price of the vacation. These packages include a maximum of $10,000 coverage for trip cancellation and up to $25,000 for emergency medical evacuation. They typically also include such things as baggage loss and flight insurance. Three insurers with comprehensive packages are Travelex (800-228-9792; www.travelexinsurance.com), whose insurance costs about $400 per $5,000 trip; CSA Travel Protection (800-348-9505; www.travelsecure.com), which costs about $140 for a $5,000 trip; and Travel Guard International (800-826-1300; www.travelguard.com), whose policies run about $400 for a $5,000 trip.

But you may want to create your own customized package, especially if all you need is medical and evacuation coverage. In this case, buy a policy priced according to the length of your trip. You can purchase separate policies from Access America (800-284-8300; www.accessamerica.com), which offers up to $10,000 in medical expenses and $50,000 for evacuation. A nine-

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