Come rain or snow, there's insurance for it

THE BALTIMORE SUN

As summer approaches and travelers plunk down nonrefundable deposits to secure their vacation plans, many will inevitably be pressed -- or at least invited -- to purchase travel insurance. But is it really worth it? Some travelers don't think so, having taken trip after trip without any problems, or, because of some exclusion, found out they weren't covered when they thought they were. Others have been relieved to be reimbursed for lost airfare and hotel fees when illness or some other misfortune unexpectedly kept them home.

Everyone's tolerance for risk is different, but depending on your circumstances, new offerings from insurers may make it easier to decide whether to buy trip insurance and how to play the odds.

As the Internet has made it easier for travelers to compare policies, companies are trying harder to compete. Policies are becoming less rigid about what are considered valid reasons for cancellation of a trip. Higher reimbursements are possible for flight cancellations, medical expenses and lost baggage. And you can even get coverage for travel disappointments as specific as losing out on a tee time at the golf resort.

AIG Travel Guard, among the biggest players in the travel insurance business, is introducing an array of new options by early next month, including coverage for travelers who must cancel a vacation because of work obligations or even for those who change plans on a whim. It is increasing the maximum trip cancellation insurance to $100,000 from $30,000, for travelers with big vacation budgets, and is more than doubling its maximum coverage for baggage loss, to $2,500 for its premier plan. (The new options are pending approval in some states.)

Another insurer, Travelex, added benefits to some existing policies in November, including reimbursement of travelers for unused theater, sports and concert tickets purchased with a credit card while on vacation. It also added a new service to help travelers cope with identity theft, which includes reimbursement for specified expenses you incur to restore your identity, up to a maximum of $10,000.

When work calls

Access America's BizPack policies, introduced last summer, are business-themed travel insurance offerings, priced at $19 per adult, that let travelers get money back if they can't go on vacation because of unexpected business obligations.

There is even a plan for golfers, from AIG Travel Guard, that includes baggage coverage for golf clubs, as well as refunds for prepaid golf fees when a round is canceled because of bad weather.

The increasingly chaotic state of commercial air travel, with more bags being mishandled and, earlier this year, passengers stranded in airports and on tarmacs, makes the new travel insurance options all the more attractive to vacationers. More than 17 million travel insurance policies are sold each year, according to the U.S. Travel Insurance Association, whose members have seen a surge in interest since the Sept. 11 attacks. Policies typically cost between 4 percent and 7 percent of the price of the trip, with fees based on the traveler's age and on the cost and length of the trip.

As the market matures, "the companies are leapfrogging one another" to expand coverage, said Chris Harvey, chief executive of squaremouth.com, an online travel insurance agency. "One will come out with $50,000 medical, the next $100,000."

More traditional travel insurance policies reimburse travelers who are forced to cancel because of weather, airline strikes, acts of terrorism that affect their destinations, serious illness or the death of a close family member. But until recently travelers weren't reimbursed if they simply changed their minds and decided not to go. AIG Travel Guard's new Cancel for Any Reason add-on coverage, offered on two different package plans, reimburses 75 percent of the trip expenses if a traveler cancels a covered trip up to two days before departure -- no questions asked.

This flexibility comes at a price -- 30 percent to 40 percent more than for standard coverage. But the option may be worth considering if you want the flexibility of changing your travel plans at any time without losing the bulk of what you paid.

"It may be as trivial as all of a sudden you get invited to a neighbor's wedding or a better offer comes up," said Dan McGinnity, a vice president of AIG Travel Guard. But travelers may also want to recoup some expenses if they are anxious because of world events, he added. Most policies accept terrorist activity as a valid reason for canceling a trip only if the act occurred in a city on your itinerary within 30 days of your scheduled arrival. With the more comprehensive policies, if you're planning to travel to Spain and something happens in London, you can call off the trip and get most of your money back. Foul weather

Hurricane coverage is also getting more comprehensive. In the past, some travelers who thought they were covered for trips disrupted by hurricanes found they would be reimbursed only if the airline or cruise line had stopped going to the region because of a storm. Some policies denied reimbursement even if the traveler's hotel was destroyed, as long as it was possible to get there. Those loopholes are largely gone now.

"We've seen more and more companies -- about 30 to 40 percent -- allow travelers to cancel their trip if a hurricane makes a destination uninhabitable," said Jim Grace, president and chief executive of insuremytrip.com. "Say a hurricane hits Cancun," he said. "Your airline might be flying, but your hotel is toast. You really want that destination-uninhabitable coverage."

But before you buy any travel insurance, be sure to check your credit card policy first to avoid overlapping coverage. For example, a traveler who reserves and pays with an American Express card is automatically covered against theft of most rental cars, or damage to them.

Your homeowner or renter insurance may also offer some travel-related coverage. According to the Insurance Information Institute, most such policies reimburse for stolen items, minus the deductible, even if the valuables are not swiped at home.

The best time to buy travel insurance is when you book your trip. To get the most out of your coverage, be sure to buy at least 15 days before your departure. And to get the best rates, check online insurance agents such as squaremouth.com, insuremytrip.com and totaltravelinsurance.com, which offer side-by-side comparisons.

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